What are the best mutual funds available in the market? Which funds accrue maximum profits? What are the crieria for evaluating a fund? Which funds provide the best SIP options? Are SIPs the easy way of making quick bucks?
When and how should one buy mutual funds?
In an hour-long chat on rediff.com on Friday, mutual fund expert Rahul Goel answered to many such readers' queries. Here is the transcript:
Rahul Goel says, Good afternoon everybody! Let's get started!
meenal asked, Hi, Rahul, I am 26 years old & have invested in following fund through SIP: HDFC top 200/3000 & SBI magnum quantra. for the next financial year i need to plan for saving tax Please suggest me good investment ioption to save the tax & also tell give your take on above funds, How long should i bee invested in above funds?
Rahul Goel answers, at 2008-02-01 13:01:34meenal, hi. to begin with why are you investing in these funds?! what is the objective you have in mind when putting aside this money? next year you wish to invest to save tax. but i would advise that before you do that, please get clarity on your objectives. a smart financial planner can then guide you in a manner that with the same amount of money you can achieve multiple objectives.
arijit asked, Hi Rahul, Till now i have not invested in any of the ELSS funds how many ELSS funds should one have in his portfolio?..any advice about SBI tax gain?????
Rahul Goel answers, arijit, hi. two tax saving funds are more than enough. NFOs are a no-no. there are brilliantly managed existing schemes out there... why take unnecessary risk by investing in a new fund....
asked,
Rahul Goel answers, manisha, hi. its good that you started saving. but did you plan the investments right? i guess not. there are a couple of points here. one, if you are planning for retirement, you should haev ample clarity on how much you need to save to achieve this objective. any financial planner can guide you with this. a simple calc is also available on personalfn.com. the other point is that when you are investing money, you should never put all of it in in one scheme! you should invest your monies in a portfolio of funds which are best suited to you. this is not an easy task and definitely requires professional help!
super asked, hi, i m 31 yrs old & want to invest in ULIP @35,000 per annum for next five year which plan will give better results in coming year
Rahul Goel answers, hi. why do you want to inevst in a ulip?! and that too for 5 years?!! in our view, even the most cost effective ulips take about 10 - 12 yrs to start looking as attractive as a comparable invetment in a mutual fund... investing in a ULIP only for 5-yrs should be a losing proposition to begin with.
asked,
Rahul Goel answers, hi. each sip insallment that goes in, will have its own 3-yr lock in. so the installment which goes 12 months from now, will be redeemable only three years after the investment is made. switches between equity schemes from the same mutual fund can be load free... but please confirm this at the time of executing the transaction.
asked,
Rahul Goel answers, shetty, hi. pl do not invest in a fund which is giving a good return. look for a fund which suits you best.
sdfsd asked, Hi I am 30 yrs old and want to invest in MF to save tax. Whats the best fund. should I go for NFO for ELSS. As a matter of principle I want to go for 100% Equity
Rahul Goel answers, hi. funds like franklin india tax shield make it to the list of good tax saving schemes. not sure why you wish to go for an NFO. as far as we are concerned, most of the NFOs are no more than a marketing initiative aimed at increasing the assets under management of the fund house.
parthamca asked, hi sir, i am planning to invest MF instead of shares,what u will suggest on this and which is the best sector to invest MF pls suggest on this issue
Rahul Goel answers, hi. well, if you do not have either the time or the skill to pick and manage a stock portfolio, you should opt for mutual funds. investing in sector funds is something that we advise you do not do. such funds, in the long term, are more likely to destroy value rather than create it. in fact most personalfn clients have no more than 10% of their money in thematic funds... and here too we are very conservative in our selection. best for you would be to invest in diversified equity funds to begin with, given that you have appetite for risk.
isrk asked, WHAT IS THE DIFFERENCE BETWEEN OPEN ENDED AND A CLOSE ENDED MUTUAL FUND. IF ONE IS BETTER THAN OTHER THEN WHY PEOPLE GO FOR THE SECOND ONE..?
Rahul Goel answers, i will answer your second question first.... the reason people invest in close ended funds is that such funds pay higher commission to agents... so they have an incentive to push these funds onto unsuspecting invetors. however, sebi has now banned this practice... expect the craze for close ended funds to end very quickly.
Lakshmanan asked, I am aged 24,Working as engineer.I plan to invest in Mutual funds around (Rs2000 - 3000) monthly.I need the returns in 2 - 3 Years.Which banks/Companies mutual funds i need to go for to get the maximum return ?
Rahul Goel answers, lakshmanan, hi. if your time period is less than three years, then you must avoid investing all your money in equities. one option is to go in for balanced funds... or even MIPs in a small amount. the long term return from equities should be over 15% pa; a well managed balanced fund could generate about 12% pa.
murtuza asked, Hi. I made SIP in following funds DSP Tiger, JM Basic and ICICI Infra for 10000 in dec 07 what is your view on this funds for another 1 year period. Thanks
Rahul Goel answers, murtuza, hi. if you have a 1-yr investment horizon then you are not only in the wrong funds, but also in the wrong asset class. inour view, any investment in equity should be done with a minimum investment horizon of atleast 3 - 5 yrs. for a 1-yr horizon, FMPs and low risk MIPs are best in our view.
asked,
Rahul Goel answers, hi. yes, you can have some money in index funds... however, we believe that actively managed funds will continue to outperform index funds in the forseeable future. yes, in the last year or two index funds have done better... but this in our view is not a trend...
asked,
Rahul Goel answers, ravi, hi. if you have appetite for risk, and are willing to remain invested for a minimum of 3-yrs, then consider schemes like hdfc equity and franklin inda flexicap.
asked,
Rahul Goel answers, raani, hi. it seems your agent has
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