I compared ELSS (Equity Linked Saving Scheme) mutual funds on the basis of their AUM (assets under management) size and past performance in 6 months, 1 year, 2 years and 3 years.
Finally following funds were found to be good.
Canara Robeco Equity Tax Saver, Sundaram BNP Paribas Taxsaver, HDFC Taxsaver, SBI Magnum Tax Gain Scheme 93 – Dividend, Franklin India Taxshield – Growth, DSPBR Tax Saver, Fidelity Tax Advantage
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Dear Pankaj,
I want to open a new SIP for INR 2000/ Month for 18 mnths. I have shortlisted three funds 1. HDFC Mid-CAP Oppurtunities 2. HDFC Top 200 & 3. HDFC Equity Fund. Please suggest which one to go for.
@Sudip
These three funds fall under different categories.
HDFC Mid-Cap is a mid and small cap mutual fund, HDFC Top 200 is a large and mid cap whereas HDFC Equity is a multi cap fund.
Without knowing your investment horizon, risk appetite, existing exposure and future needs it won't be good to advise you one fund from these.
If its your first fund/exposure to mutual funds/equity, then I would suggest you to start with a large cap fund, which are less risky.
Dear Pankaj,
I want to start a new SIP with HDFC TOP 200 for 18 months. Kindly suggest me on that.
@Sudip
HDFC Top 200 is one of the best funds in its category.
But investing in it depends on your need.
If its the first time, you are investing into equity mutual funds and want to take less risk, consider Large-cap diversified mutual funds like DSPBR Top 100 equity or Franklin India Bluechip.
Hi Pankaj,
I want to invest in 2 Small and Midcap fund through SIP
1.SBI Magnum Emerging Business(D)(1000/)
2.Reliance Equity Opportunity(G)(1000/)
Right now these two funds are performing well.
what do u suggest shall i go with these funds or invest in other funds.
Thanks,
Souradeep
@Souradeep
I would advise following funds in Small and MidCap segment:
IDFC Premier Equity, ICICI Pru discovery Inst I, Birla Sunlife Pure value and Birla sunlife Dividend yield plus
Hi Pankaj,
Right now i am investing Rs. 9000/ per month through SIP
HDFC Top 2000-2000/
HDFC Equity-2000/
DSP BR Top 100 Equity-1000/
HDFC Balanced-1000/
Reliance RSF balanced-1000/
HDFC Midcap-1000/
DSP BR Small and Mid cap-1000/
i want 2 invest 1000/ more in Birla SL Divident Yield.i heard that investing in so many funds is not good for fund management.So i have to bear fund management cost.is it right?because i have already invested 9000/ in 7 diff funds.if it is nt good i can go for recurring deposit for 1000/ per month.What do you suggest?shall i gofor Birla SL divident Yield or recurring deposit?waiting for ur valuable suggestion.
Thanks,
Souradeep
@Souradeep
Its difficult to mange (track, renew, redeem, switch, updation etc) so many funds for you.
There is no other disadvantage of investing in 8 funds.
Fund management charges are fixed cost that is charged by mutual fund company for managing your investment. As they are in percent terms, 10 SIPs with 1000 Rs each will have same fund management cost as one SIP of Rs 10000.
Go with Birla SL dividend yield, there is no need to go for RD unless you need safe returns.
Hi Pankaj,
SEBI has already announced that existing investors have 2 pay Rs. 100 for per 10000 investment in Mutual fund.I am investing Rs.10000/ per month through HDFC ISA account. is it applicable for me also?If it is applicable,can u pls tell me how much i have 2 pay for per year .FYI i am investing 10000/ per month in 8 funds(2000 in two funds and 1000 in 6 funds).
Thanks,
Souradeep
@Souradeep
If you read full news, here is the brief:
These charges will only be applicable on fund investments exceeding 10,000. No charges will be levied on transactions other than new fund purchases. Sebi has exempted direct fund transactions from this levy. Transaction charges - of 150 for new investors and 100 for existing investors - will be charged to the fund in three to four installments.
It won't be applicable to you as your investment amount is less than 10,000 in a single mutual fund.
You should start investing directly for mutual fund, which won't attract charges even if investment is more than 10,000.
Hi Pankaj,
Thanks for ur support.
In a single mutual fund i am investing 12000(1000/ per month) through SIP.For HDFC Top 200 i am investing 2000 PM .For that i have 2 pay (100*2)=200 Rs per year i guess.If i am wrong pls clarify.Btw what do u mn direct investmet.Is it investment through demat account?Can u pls clarify those things?
Thanks,
Souradeep
@Souradeep
There are not enough details/explanation on this news as of now, so can't comment on whether this 10,000 will be total investment amount or in-one-go.
Direct investment is not though demat accounts, but direct investment to mutual funds with no agents involved.
Please read following articles to know more:
http://www.pankajbatra.com/india/how-to-transact-mutual-funds-online-directly/
http://www.pankajbatra.com/finance/mutual-fund-investment-with-zero-entry-load/
http://www.pankajbatra.com/finance/best-way-to-apply-in-sip/
Hello Pankaj,
I want to invest 3000 in Tax saving plan, kindly suggest which one is better Canara Rebeco or HDFC 200.
Regards,
Jyoti
@Jyoti
HDFC Top 200 is not a tax saving mutual fund.
You can consider investing to any of these funds: Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage.
Thanks Pankaj. However can you tell me which one is better Canara Robeco Equity Tax Saver or HDFC Taxsaver. Or shall i invest in both.
Thks & regds,
Jyoti
@Jyoti
If you have to choose one out of these, go with HDFC tax saver.
Hi Pankaj,
Im planning for an SIP, to invest Rs 36,000 an year in the following format for the next 20 yrs without switching through the funds. Pls advise with options, if I need to modify my portfolio in the current scenario to further strengthen it.
HDFC Top 200 - Rs 1000
Fidelity - Special situations fund - Rs 500
Fidelity - India value fund - Rs 500
Canara Robeco Equity Tax Saver - Rs 500
Franklin India Bluechip - Rs 500
Thanks,
Eby
@Eby
You can divide 3000 per month into 1000 each into large cap, Mid and small cap.
1000 in large Cap, you can pick from: DSPBR Top 100 equity, Franklin India Bluechip and ICICI Pru top 100.
1000 in Large & Mid Cap, you can pick from: Fidelity India Growth, ICICI Pru Dynamic Inst I, HDFC Top 200, Canara Robeco Equity Diversified and Franklin INdia prima plus.
500 in Multi Cap, you can pick from: HDFC Equity, Templeton India Growth, HDFC Growth and Reliance Regular Savings Equity
500 In Mid and small cap, you can pick from IDFC Premier Equity, ICICI Pru discovery Inst I, Birla Sunlife Pure value and Birla sunlife Dividend yield plus
Canara robeco equity tax saver is tax saving mutual fund and there won't be any benefit available for it from next year, so you may invest in it this year (2011-12) only.
Don't start 20 years SIP with same funds. First start for 1-2 years and keep changing funds based on their performance after that period.
Hi Pankaj,
I dont prefer to switch over to funds at regular intervals, rather I want to systematically invest Rs 3000 pm for the next 20 yrs. What investment option would you suggest pls? Also, request you to give me options of the best funds available.
Thankyou
Eby
@Eby
You may choose SIP for 20 years. But keep tracking of performance as some other funds may start performing better and in that case you may want to stop earlier SIP and start in any other fund.
Fund options would remain same as suggested in earlier comment.
Hi Pankaj,
Thanks so much, you've been of great help....
Ive decided to invest as follows per the options you suggested.
DSPBR Top 100 equity - Rs 1000
HDFC Top 200 - Rs 1000
Templeton India Growth - Rs 500
IDFC Premier Equity Fund - Plan B (G) - Rs 500
I shall keep in mind of exiting every 1-2 yrs depending on the performance of the funds. My only concern in this matter is that, when I do this exercise at the aforesaid intervals, in the long term will I end up loosing some money on any sort of charges?
@Eby
Funds look good now.
You may valuate fund performance every 1-2 years and switch to any other better performing fund.
There is no income tax on long term gains (more than a year) on equity mutual funds, so you may consider exiting one fund and entering another without any loss/charges.
Only thing that may come is STT (Securities Transaction Tax) at 0.2%.
Thanks a ton Pankaj!!!
Its very much informative and useful!!!
Shall definitely recommend the site to my friends :)
Hi Pankaj,
Currently I'm investing 2000 p.m. in DSP BlackRock Top 100, HDFC Top 200 & ICICI Pru ULIP,
16000 p.a. in LIC & 30,000 p.a. in PPF. As I've bought AVIVA Term Insurance of 75,00,000 for next 35 years so I want to discontinue my ULIP & LIC and invest 2000 p.m. in ELSS Fidelity Tax Advantage & also 2000 in IDFC Premiere Equity fund. Does this form a good portfolio. Also, as I'm discontinuing my LIC so is it good to put that amount in PPF or should invest that in mutual funds? Please suggest if there are any better options.
Thanks,
Nitin
@Nitin
The decision took by you to discontinue ULIP and LIC insurance is correct. Insurance is not meant for investment.
Keeping investment (mutual funds, PPF) and insurance (term insurance) separate is a good move.
Mutual funds selected by you are also good ones.
You must divide your investments into equities and debt based on your age. At younger age (<35), 80:20 ration can be maintained in equity vs debt.
As age progress one may move towards debt and balanced funds.
Amount withdrawn from LIC can be invested to PPF or NPS for long term investment.
Thanks Pankaj. Just one more question on this that as I was availing tax rebate on the premium of 16,000 paid for LIC, so I'm thinking of investing the same as SIP of 2000 p.m. in some ELSS tax advantage fund so that I can still avail the rebate or is it good to put that amount in PPF?
@Nitin
You can invest in tax saving mutual funds this year (FY 2011-12) but from next year there won't any deduction available for these under Direct tax code.
Even if you invest in PPF, you will get same deduction. PPF deduction will continue even under direct tax code.
Thanks Pankaj.. :o)
I just read about direct tax code from April 2012 and it says that ELSS will not get tax rebate from next year. Does this mean that ELSS bought before April 2012 will also not get rebate. As I'm planning to buy SIP for Fidelity Tax Advantage, so will it receive tax rebate from Aril 2012 onwards??
@Nitin
Tax benefit is not available for tax saving mutual funds from April 2012. Benefit for funds purchased before that would already be taken in respective year.
If you start investing in SIP in ELSS, do it only till March 2012, as after that there won't be any benefit.
In that case to avail tax rebate we are left with limited options of Insurance (Life & Medical), PPF & NPS.
@Nitin
Yes, once DTC comes into play only some of the existing tax deduction methods will exist.
Pure Insurance and retirement/pension scheme will exist.
Hi,
I want to start SIP of INR5000.00 in the ratio of
HDFC TOP200 INR1000.00
DSPBR TOP 100 INR1000.00
SUNDARAM SELET MIDCAP INR1000.00
PPF INR2000.00
all this investment I want to continue for 15 years, pls suggest me am I right or not
N.B: I am 36yrs old
@BD
Your funds section is good.
However you may consider replacing Sundaram Select midcap with IDFC Premier Equity or ICICI Pru discovery Inst I
You may start SIP for 15 years, but keep tracking for fund performance and in case you see that any fund is under-performing, stop SIP and start in another one.
Dear Pankaj,
My earning per month is Rs. 25000 pm.I want to invest in Tax Saver mutual fund to get tax benefit.What will be the best mutual fund to invest and how much.I don't have any other tax saving policy.Kindly suggest other tax saving option with the tax-saving mutual fund.
Thanking you,
Pinaki Mohan Sutradhar
@Pinaki
You can start SIP in HDFC tax saver mutual fund.
You should also buy term insurance and medical insurance for you and your family.
Please also read following answer pages:
http://www.socialfinance.in/questions/7/tax-saving
http://www.socialfinance.in/questions/45/investment-advise
Hi Pankaj,
I have started investing on SBI Gold fund (ll be launching on 5 Sept) through SIP(2000/). Is it a right decision in current market scenario.Please guide me.
Thanks,
Souradeep
@Souradeep
SBI gold fund invests in Gold ETFs. Gold is already trading on a pretty high price. Upside may be limited from here and a correction may also happen.
As US economic conditions are not good, countries are buying gold, hence high demand has increased price.
It will be ok to invest 10% of your investments into such speculative assets.
If you have demat and online trading account, it will be better to invest into gold ETFs as they have low expense ratio compared to gold mutual funds.