While its better to invest in Mutual Funds in SIP way, you should not invest in too many funds by dividing your investment too much. Pick two or three good Mutual Funds and put a fairly good amount of money in each fund. Mainly it should be a diversified investment. A mix of large cap funds and mid cap funds. See the Video below and understand it.
SIP (SYSTEMATIC INVESTMENT PLAN) OF MUTUAL FUND Many of us have always thought of investing in Equity market and make money fast. But what restrains us is the volatility and uncertainty of the market. We want to grow iur money but nobody will guarantee us the return in the equity or secondary market. Many a time after we have entered the market market start falling and we remain silent spectator of our money being devalued and investments disappear. But as per the analysts investing in equity markrt over a long period of time will get us better return. But what stocks to buy , what stocks to sell and the most important of all when to buy or sell. Many a time we have thought of or rather wished of some body helping us doing the above decisions and growing our money. But who and how. The answer is Mutual Fund and the person is the Fund Manager. Even the Mutual Funds are volatile during the market volatility. For this a great weapon is SIP or Systematic Investment Plan in Mutual Funds. SIP is investment of a particular amount of money every month in any particular mutual fund. SIP makes you a disciplined investor and and you can see your money grow in a systematic way. SIP investment will even out the odds and the volatility of the market. To give you an example and illustration please see the below table about the investment in monthwise of different value and and the returns over a period of time. Monthly Savings - What your savings may generate Savings per month Total Amount Invested Rate Of Return (For 15 years) (In Lakhs) 6.0% 8% 10% (Rupees in Lakhs 15 years latter) 5000 9.0 14.6 17.4 20.9 4000 7.2 11.7 13.9 16.7 3000 5.4 8.8 10.4 12.5 2000 3.6 5.8 7.0 8.3 1000 1.8 2.9 3.5 4.2 The above illustration is take from HDFC Mutual Fund http://www.hdfcfund.com/InvestPlans/ContentDisplay.aspx?ReportID=A1D80AB3-713C-44ED-A907-1549273F31C2). So act today . call your finanacial advisor. Discuss your investment motive, horizon. Let him suggest you the best Mutual Funds as per your requirement and risk apetite. The Funds which are invested in equity market are Equity Diversified funds . The Best Equity Diversified funds are as follows. TOP 5 OPEN ENDED -DIVERSIFIED FUNDS - PERIOD (LAST 5 YEARS) Rank Scheme Name Date NAV (Rs.) Last 5 Years % 1Reliance Regular Savings Fund - Equity - Growth Feb 4 , 2011 29.8334 23.8839 2IDFC Premier Equity Fund - Plan A - Growth Feb 4 , 2011 29.9437 22.7334 3HDFC Top 200 - Growth Feb 4 , 2011 201.879 19.2382 4HDFC Equity Fund - Growth Feb 4 , 2011 268.774 19.1034 5Birla Sun Life Frontline Equity Fund - Plan A - Growth Feb 4 , 2011 84.83 18.9359 *Note:- Returns calculated for less than 1 year are Absolute returns and returns calculated for more than 1 year are compounded annualized. http://www.mutualfundsindia.com Its Financial year end and its taxing time again. Every body is bussy in saving tax to be deducted in the last three months.We generally find it very difficult to find the different schemes to save tax as time left is very small.Talking of Life Insurance products , for tax saving; we should not take decission in a hurry as these investment are for life time. A thorough study and analysis is required for the selection of the Insurance products. Apart from tradtional Tax saving instruments there is another instrument for tax saving which is easy to choose and invest. These are called ELSS(Equity Linked Saving Schemes) or Tax saver Mutual Funds. These have have lock in period of 3 years and geerally give good return of 20% CAGR.I my self had invested certain amount in HDFC Tax Saver-96(http://www.hdfcfund.com/Products/SchemeDetails.aspx?SchemeID=f2f457f7-fd19-44d1-a788-8351bbb75ffd )in 2004 and has quadrapuled my money (recently it is three times as the market is correcting a little bit). Tax Saving Mutual funds are a gateway to Mutual Fund Investing and better way to enter into secondary market i.e. stock market. You also get a feel of the market and get to know how the Mutual Funds operate in general . You can watch your fund operating by tracking it as it has a lock in period of three years. It makes you more disciplinned investor and latter on a mature investor.Do not worry about the current NAV of the Funds as they may be more and apprecited a lot after the lunch .These give you a feel of how the Funds have performed over the period of time. You can also go for new funds also. Lastly I do not understand why the Govt. is stopping the ELSS schemes from the FY2012-2013.These funds will not be there after 2011.The Finanace ministry should rethink about its decission to abolish ELSS. These give tax saving as well as investment opportunities to tax payers. Below is the list of top 5 Tax saving Mutula funds based on last 5 yeays performance Rankwise. Rank Scheme Name Date NAV (Rs.) Last 5 Years % 1Sahara Taxgain - Growth Jan 31 , 2011 36.4721 15.4611 2HDFC Taxsaver - Growth Jan 31 , 2011 227.675 14.3194 3Franklin India Taxshield - Growth Jan 31 , 2011 201.3839 13.6192 4Sundaram Taxsaver - (Open Ended Fund) - Growth Jan 31 , 2011 42.8451 13.2574 5Taurus Taxshield - Growth Jan 31 , 2011 34.45 13.1356 *Note:- Returns calculated for less than 1 year are Absolute returns and returns calculated for more than 1 year are compounded annualized. Above ranking is as per MUTUAL FUNDS OF INDIA (http://www.mutualfundsindia.com/rankfund_rpt.asp) The Following ranking of Mutual funds is asper the week ending 22.1.2010 as given by www.mutualfundsofindia.com NAME OF FUNDS NATURE 1M% 6M% 1Y% 3Y% Canara Robeco FORCE Fund EQUITY -3.53 3.88 22.96 --- ICICI Prudential SMART F DEBT --- --- 14.54 --- HDFC Prudence Fund - Gro BALANCED -2.71 4.87 19.92 12.53 SBI Magnum MIP - Floater MIP 0.2 5.24 9.46 5.3 Escorts Liquid Plan - Gr LIQUID 0.75 4.12 6.48 7.71 Axis Tax Saver Fund - Gr ELSS -4.40 5.17 22.01 --- Kotak PSU Bank ETF ETF -5.73 8.40 29.32 14.14 Baroda Pioneer Gilt Fund GILT 0.49 4.35 18.27 7.47 HDFC Index Fund - Sensex INDEX -4.34 5.64 13.73 6.93 Mutual Funds are great Investment tools for a normal investor. I do not know why people are afraid of investing in Mutual Funds in India.Many people take a route of direct investment in Equity market and burn their fingers.We can not time market and cant take prompt and agile actions as Mutual Funds can do with our investments. Mutual Funds give us access to secondary market in an indirect and safe way.Fund Managers can do the work for us. Have you ever thought why stock markets crash.It is because of us; we the retail investors. Our number is very small as compared to FIIs or the Foreign Institutional Investors. When they go on holiday they pull out money from our market and our markets crash. If our number has been great markets could have survived many untime and silly crashes. For this we have to participate in the market and what better way than Mutual Funds . We have to understand its importance and its help in the growth of our economy and our personal finance too. | All About Mutual FundsAs a Regular feature I would inform you about the best mutual funds and other information about the Mutual Funds ArchivesCategoriesAll |