Q&A: Mutual Funds

By: Value Research

Go for Diversified Fund

I am holding Principal Personal Tax Saver Fund for the past 4 years, should I exit or hold?

SHISHIR RAO

Principal Personal Tax Saver is a three-star rated tax planning fund with 7.45% annualised returns over the past three years and 1.13% over the past five years. These funds have a three year lock-in, but you have already crossed this lock-in period and can redeem your investments anytime . As the returns from this investment is below the benchmark, you can cut your losses here and instead look for a better faring broad diversified equity fund depending on your risk comfort from the fund select feature section on our website.

Mid- & Small-Caps are Risky

I can invest Rs 20,000 every month through SIPs for the next 3-5 years. I am 33 and can take some risk. I earn Rs 1.3 lakh a month and am paying Rs 40,000 EMI on a home loan. I would like to invest in mutual funds with 10-15% returns. Please suggest funds where I can invest?

RANJITH PRABHU

Investing through SIPs is an ideal way to invest in mutual funds with a 3- to 5-year time frame. For aggressive investment, consider funds from the mid-and small-cap and multi-cap categories. Funds in this category are risky, which you should be aware of. For instance, multi-cap funds had 40-60% of their assets in large-cap companies over the past three years and mid & small-cap funds had at least 60% of assets in small- and mid-cap companies over the past three years. Look for funds with consistent performance over 3-5 years, which is your investment time frame, from the fund select feature on our website and invest regularly. Investing regularly is important and so is the need to review the performance of the investments.

An Ideal Portfolio

I have been investing in HDFC Top 200 for the last 18 months and wish to invest an additional Rs 6,000 8,000 in mutual funds for 5-7 years. Kindly suggest which funds should I invest in?

SHIV ADHIKARI

For a 5-7 year time period you can consider investing in the Value Research growth portfolio which has five funds with an allocation of 70% in equities. Make equal allocation to the five funds: BNP Paribas Bond Regular, Fidelity Equity, HDFC Top 200, ICICI Prudential Dynamic and Reliance Equity Opportunities, and invest regularly through SIPs.