INVEST IN MUTUAL FUNDS QUESTION AND ANSWERS FROM RANJAN JHA

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Naveen asked, Hi Ranjan Jha, apart from the risk factor, how good is to invest in MF thru SIP for 15 years or long than in PPF ???
Ranjan Jha answers, hi, in my view every investor needs to build a diversified portfolio comprising of equity, debt, gold and real estate. While PPF is a good investment the interest rate is fixed. Investment in equity funds through SIPs for 15 years is an ideal way to build wealth as equity investments take long to grow
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Rao asked, I am 61. Plan to retire at 65. Now I have FDs worth about 10 lakhs with interest rates from 6% to 7.5%. Should I invest in Mutual funds thru HDFC bank or Citybank? How much will be good and safe
Ranjan Jha answers, hi, before you entrust your money to any investment advisor, I would recommend that you think through your investment objective. If your investment objective is to earn regular income with safety of capital, then the best investment product is Bank FD. You can also opt for 9% Senior Citizen Savings Scheme that pays you interest every quarter. Investing in mutual fund schemes like MIPs etc will not ensure assured and risk free returns
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Kabir asked, What is the difference between SIP and a regular mutual fund like HDFC Infrastructure fund etc? Why SIP is good for beginners? Thanks.
Ranjan Jha answers, hi, SIP is a method of investing in a particular fund. It applies to all mutual fund schemes. In the case of SIP, the investor invests a specified sum of money into a specified fund on a specified date. SIP is good for all type of investors, be regular or beginners. SIPs help you average out the cost of purchase over the long term. Its advisable to continue your SIP for at least 3 years to benefit from rupee cost averaging.
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Karthik asked, Do you advise in Liquid Funds for short time horizons? If so, which are the best performing funds? Please advise
Ranjan Jha answers, hi, liquid funds are good for investment horizon of less than 6 months.
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rahulkumar asked, Hey Ranjan Jha, Now the market looking good these days & catching up slowly & most of the scripts or Mutual Funds coming to their 52 week high, is it a good time to buy these at present or one should wait for some corrections. If yes then how long one should wait ?Ranjan Jha answers, hi, from long term perspective markets are looking fundamentally strong. If India continues to grow at 6% p.a. then one can expect 12%-15% returns from equity funds. Having said that, I would suggest that you stagger your investments and not invest the entire amount in one go. Best is to invest via the SIP route
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Ramsden asked, Hi: I am 30 years, married and have 2years old son. I get 60K/moth to my hand after all cuttings. 10-15K is monthly household expenses. I have policies: ICICI MFs for 1.75 L annual premium and 1 L LIC annual premium. What else do you suggest me to be richer? What is best pension plan and best child plan? I am moderate risk taker. Ranjan Jha answers, hi, the answers to your question lies in making an investment plan for yourself. The plan will suggest how much you need to save on a monthly basis for each goal. It will also tell you the best investment product in each asset class. As far as pension plan is concerned, these are not the ideal products for retirement.
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saby asked, What is a debt fund?Ranjan Jha answers, hi, a debt fund is a fund that invests in low risk, interest bearing securities like, money market instrument which include Treasury Bills, Commercial Papers, Certificate of Deposits, Non Convertible Debentures, Bonds issued by PSU Companies and long term government securities. These are good for investment when interest rate in the economy are expected to go down.
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AandP asked, What is the ideal asset allocation for a 35 year old working professional with 2 kids considering investments in equity , debt, gold, real estate and PPF?Ranjan Jha answers, hi, there is no idea asset allocation but most investment advisors follow the thumb rule - 100 minus your age should be invested in equity and the balance in debt. This rule can at best be a starting point. The allocation will vary from investor to investor. The logic behind this rule is that when you are young, your risk appetite is high and you have time on your side for investments to grow. As you grow in age, you should reduce your allocation to high risk investments and increase the same in low risk investments like debt. You can allocate 5% to gold.
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arjun asked, at present I am investing in HDFC TOP-200, SUNDARAM MIDCAP, BIRLA SUN LIFE FRONTLINE EQ PLAN - A, ICICI PRU DYNAMIC AND RELIANCE REGULAR SAVINGS FUND IN DIFFERENT DATES OF THE MONTHS.IS IT OK
Ranjan Jha answers, hi, yes its a good idea to spread your investments over the month. This way you can possibly cash on to the good buying opportunities that may present themselves during the month.
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Sankara asked, I have started a SIP in Birla Mid cap fund. How good this fund for long term planning?Ranjan Jha answers, hi, this is a good fund. Since it’s a pure midcap fund, I would recommend that you restrict the exposure to 15% of your overall equity portfolio. Add more large cap funds to your portfolio.
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kannanr1 asked, Hi Ranjan Jha, I am 26 M, not married. I am planning to start investing for my retirement. Current I have about total 1 Lakh investment in these MFs and I am continuing to invest in them through SIPs DSP-BR India T.I.G.E.R -RP HDFC High Interest - STP (G) HDFC Top 200 Fund (G) HSBC Equity Fund (G) ICICI Pru Infrastructure (G) I want to maintain an 80 -20 equity debt ratio as of now and later change accordingly. For a long term investment like Retirement, should I stick to these funds for really long term like 10- 15 years?? Or Should I go for a new ULPP or ULIP?? Please suggest some more MFs for long term growth (10-15 years). Thanks, Kannan R Ranjan Jha answers, hi, in my view you have a good portfolio of mutual fund schemes. You have a higher exposure to thematic funds like DSP BR TIGER and ICICI Infrastructure. In my view you should restrict the exposure of these funds to 10%. Add few more diversified equity funds to your portfolio. As far as ULIPs are concerned, I would not recommend them. Rather go for term plan. You can ad HDFC Equity and Franklin India Blue-chip Fund to your portfolio.
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jatin asked, sir, on what ground one can decide weather to go for "Growth" or "dividend" option, & if its dividend then "dividend payout" or "dividend re-investment" and are there any other options rather than the mentioned above? And also weather do we need to invest Lump sum or in SIP format?
Ranjan Jha answers, hi, if you are looking at regular cash flows then dividend payout option is the best. IF you want your money to grow and capture the power of compounding then growth option is better. Dividend reinvestment and growth option are similar. In growth option your NAV continues to grow while in dividend reinvestment, the dividend earned by you is reinvested into the fund. Here the units keep increasing
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Guru asked, what about DSP Tiger growth mutual fund, as I purchased some units via SIP? should I sell itRanjan Jha answers, hi DSP BR TIGER fund is a thematic fund. IT invests mainly in sectors that make the infrastructure theme. Since the fund manager has a restricted universe to choose from, the fund may under perform when the underlying sectors go out of flavor. Hence, it is always advisable to invest in diversified equity funds which will have exposure to infrastructure sectors should the sector hold promise from the future point of view.
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ashish asked, Hi Ranjan Jha is there any good MF For Childs Feature..
Ranjan Jha answers, hi, yes there are funds dedicated for children future planning. However, you can consider investing in a regular diversified equity fund.
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VICKY asked, Hello Sir , which are best MF for tax saving , I am invested in DSP ( G ) , S.N.P. ( G ).
Ranjan Jha answers, hi, you can consider fund like HDFC Tax Saver among others
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rabinPanda asked, Which ULIP is good? Shall I go for a plant having short duration of premium i.e only for 5 to 6 years or a longer one.
Ranjan Jha answers, hi, in my view if you are buying a ULIP plan to meet your long term goals then it may not be the ideal investment. ULIPs combine investment with insurance. The best strategy is to keep both insurance and investments separate. For investments you should try and build a portfolio of equity funds. For insurance always opt for term plan. It gives you higher risk cover for lowest premium.
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Mishra asked, MY salary 25K, Age 26 - I have 2 LACS cash in hand... Pl. suggest some good investment to get good return & I am also planning to buy my own flat cost around 20LACS --- within in what time i can make this money & How??Ranjan Jha answers, hi, the answer to your question lies in doing a comprehensive investment plan for yourself. The plan will help you in deciding how much to invest on a monthly/annual basis for each goal. IT will also help you in deciding the asset allocation you should follow every year.
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Kumar asked, Is it a wise idea to invest in gold no. If yes which is the best fund? please adviseRanjan Jha answers, hi, its a good idea to invest in gold. Among various ETFs I would recommend that you opt for Quantum Gold Fund
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atif asked, sir I want to know that the new axis bank mutual fund NFO which is coming should I invest on short term basis., I looking for invest Rs 50k for a period of 1 year
Ranjan Jha answers, hi, AXIS MF is a new entrant in the AMC busienss. I would recommend that you wait and watch the performance of this fund house for at least 3 years. Rather, you should look for funds with history of 3-5 years to show for.
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Pradeep asked, Sir, This is the first time I am going to Invest in the mutual fund so please suggest which fund will be good to invest?Ranjan Jha answers, hi, since you are a beginner, I would recommend that you start investing in mutual funds through SIPs. If you are investing for your long term goal like retirement then investing in equity fund makes sense. Start with well managed diversified equity funds that have a consistent track record of atleast 5 years to show for. You can consider investing in HDFC Equity Fund and Franklin India Blue-chip Fund, among others.
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Suhas asked, Hi Ranjan, this is suhas here, I invest around 10k monthly on mutual funds, I am planning to invest another 5k monthly, can u please suggest me on this.Ranjan Jha answers, hi, yes its a good idea to invest another Rs 5,000 by way of an SIP. IT will ensure that you average out your buy price over the long term. Equity investments especially require 4-5 years to grow. Having said that, I would recommend that you make an investment plan for yourself and invest accordingly. Your investments should help you meet the financial goals you have set for yourself.
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AandP asked, Like stocks, is it important to keep booking profits in Mutual Fund also even though the investment is for long term or is it wise to just choose the growth option and let the money grow but just keeping an eye on the performance of the fund?Ranjan Jha answers, hi, in my view if you have made more returns than expected then you should book profits. Profits should also be booked to balance your portfolio from time to time. Every time you consider booking profits take into account the tax implications and transaction cost. It is important to monitor the portfolio on a regular basis and best to review your portfolio at least once in 6 months.
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VP asked, How does the mutual process work? Ranjan Jha answers, hi, in a mutual fund there is a professional fund manager who manages the portfolio. The mutual fund collects money from various investors and form a common pool and buy and sell securities as per the investment mandate given to the fund manager. The buying and selling of units happen at Net Asset Value (NAV) calculated at the end of day.
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sesh asked, Is it the right time to invest in GOLD ETF. if no, then when will be the right time.Ranjan Jha answers, hi, in my view you should stagger your investment in gold over 6-12 months, buy gold on every dip. Do not rush in to buy gold. In my view all investors should have at least 10% exposure to gold. Gold acts as a hedge against inflation and an insurance when the world faces financial crisis. The best way of investing in gold is through the Gold Exchange Traded Funds (ETFs). Its easy to buy and sell gold through an ETF compared to physical gold. Also, the investor is assured of the quality of gold and saved of the botheration of safe keeping of physical gold.
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