Zero Entry Load - A Failure

Recently, there were reports in Financial Chronicle and other Business papers that there were "few takers for zero entry load option in Mutual fund Investment". This was evident even before the introduction of the concept. There is huge list of funds and to choose one which is best suited to you, is not an easy task. Mutual Fund Advisors (also popularly called as Independent Financial Advisors) play a major role in this.
If investors go through these IFAs, it becomes easier for them in case they want any alteration or when they face any problem regarding dividends, etc. If the investors buy directly from fund houses, they need to approach each different Fund houses themselves, wasting nearly a day.
Even in developed nations, a major portion of funds are sold through the IFAs.
Many investors avoid going DIRECT becoz they do not want a Biased from the Fund house, but a Good unbiased advise which only a Qualified Mutual Fund Advisor can give.

Dhirendra Kumar's take on Free Insurance by Mutual Funds

Mr.Dhirendra Kumar of Value Research was asked for his views on Free Insurance by Mutual funds and this is what he said,

On insurance product mixed with SIP plans offered by Birla Sunlife, Reliance Mutual Fund, DSP:

It is an attractive thing. You are getting a term cover for free. The product or the term cover for free is offered by two fund families, which offer a reasonable range of good equity funds. So, if one has to get into equities steadily over time then these fund companies offer a good choice. It comes for free so get it and you do not have to put a lot of money upfront to buy it. So, getting a meaningful thing for free is a good idea and people should consider it. But, I do not think it’s a missed opportunity because the term cover which you get even when it comes to an end, you are not at a significant loss because term cover for a lot of people comes as a cheap avenue but not too many investors go for it. Anyway you will get a substitute for a very low cost. For somebody who is getting this benefit, it is almost like getting something worth Rs 2,500 per annum for free.

If I were to choose two funds, I would choose Birla SunLife Equity and Reliance Growth. Reliance despite having too many equity funds, the choice of good equity fund is getting limited.

Funds other than ELSS for sip

Mr.Saurabh asked :

Hi



I am a new user to this site and I must
say you are doing a great job!!



My Portfolio includes a SIP of a total
of 6,500 amongst these funds



1. SBI Tax saver,93

2. Birla Tax Saver,96

3. Sundaram Tax Saver Fund



I hope to open another SIP in HSBC Fund
which can give me free Critical Illness cover. Could you please advice
if it is ok.



Also, please comment on the best fund
(irrespective of free moolah or tax saving scheme) in which a SIP can be
started for a long term perspective. I have adequate insurance as well.



Thanks



Saurabh

---

SRIKANTH SHANKAR MATRUBAI replied

Dear Saurabh,
Thank you for your kind words.
Are these the only funds in your portfolio or any there any more?. Why only ELSS funds?. You should be investing in Diversified Equity Funds which are not only more liquid, but also have given more returns.
All the three funds you have invested are very good and you can stay invested in the same. However, you can discontinue your sip in SBI Tax Gain 93 Fund, as its corpus has become bloated and also its recent performance has been below average. And moreover, the change of Fund Manager, would have some impact on the performance, which has to be seen.
Instead, you can consider investing in DWS Tax Saving Fund, which has a very good performance since its recent inception. The Free Life Insurance of 5 times your investment given by the Fund is an added Bonus. Even without this offer, you could consider investing in the Fund. It is that good.
As for your investment in HSBC Fund, it would have been better if you had given the name of the fund you have invested in. If it is HSBC Equity Fund, it is a very wise decision.
For non-ELSS funds, from a long term perspective, you can consider investing in the following funds through SIPs:
Birla sunlife Equity Fund
DSPML World Gold Fund
Fidelity Equity Fund
HDFC Prudence Fund
JM contra Fund
Mirae Asset India Opportunities Fund
Reliance Natural Resources Fund
Sundaram Select Focus fund
continue investing through sips. Do review your portfolio regularly.
Best of luck,
Srikanth Shankar Matrubai

do I need to Balance my Portfolio?

Hi Srikanth,
Thank you very much for your advices on this goodfundadvisor blog.
Really they are very helpful. Please give me some suggestions to improve my
port folio. I feel it is not properly balanced currently. It has too many funds.
I am 30. can invest 25000 per month in MFs. I can take High risk as I dont have any
serious financial commitments. I am planning to invest for a 20 years.
My investment goals is long term and for retirement.

current investments

DSP-ML Top 100 Equity - RP (G) SIP Rs 2000 per month
DWS investment opportunity (G) SIP Rs 2000 per month
Fidelity equity (G) SIP Rs 2000 per month
Kotak Opportunities Fund (G) 25th August SIP with Rs 3000 per month
Reliance Growth Fund - RP (G) SIP Rs 3000 per month with SIP insurance
Sundaram Select Focus - RP (G) 25th August SIP with Rs 2000 per month
SBI Magnum Multiplier Plus (G) Rs 20000 Lumpsum in july
HDFC Growth Fund (G) SIP Rs 2000 per month
Kotak Opportunities Fund (G) SIP Rs 3000 per month with starkid insurance
Reliance RSF - Equity SIP Rs 2000 per month
SBI Magnum Contra Fund (G) SIP Rs 2000 per month
Tata Infrastructure Fund (G) SIP Rs 2000 per month
ICICI prudential Infrastructure Rs 5000 Lumpsum

Thanks,
Anjan


SRIKANTH SHANKAR MATRUBAI replied
Dear Anjan,
Thank you for your kind words. I hope you have taken sufficient Term Insurance to secure your future. If not, do that on priority basis.
You have a very good selection of funds. You do not need to tinker too much with them. Your 2 lumpsum investments in SBI magnum Multiplier Plus and ICICI Prudential Infrastructure can continued to be held for now.
You have 2 sips in Kotak Opportunities Fund of 3000 each. While you continue with the Starkid Insurance sip, you discontinue with the other one and consider investing in
2000 Sip in Birla Sunlife International Equity Fund - Plan A (An international fund, and added bonus of Free Life Insurance of 2 lakhs)
1000 Sip in JM Contra Fund (Although you have SBI Contra, note that SBI Contra is more of a Diversified Fund rather than a Contra Fund)
Also, switch your sip investment in HDFC Growth Fund to HDFC Prudence Fund. This Fund has been a stellar performance since inception and continues to work its magic even in Bear Market conditions.
Just because you can stay invested for 20 years, does not mean "Invest and Forget". Keep reviewing your investments every 6 months or so to see any noticeable change in any fund's mandate/performance/attribute.
Slowly, as the years progress, switch out from Opportunities Funds to Large Cap Funds to give better stability to your Portfolio.
Anyway, good work. Keep going on.
Best of luck,
Srikanth Shankar Matrubai.

23 year old's portfolio

Dear Shrikanth,

I am a regular visitor of your Blog. Keep up the good work.

I am 23 year old and investing 6000 every month through SIP's. I am a long term investor , planning to invest for atleast 5 years.



2000 in HDFC Growth Fund.(Growth)

2000 Birla Sunlife Frontline Equity Fund. (Growth)

2000 DSPML Top 100 Equity Fund. (Growth)

Do you think that is this a good distribution as i can take higher risks at my age.

Would you suggest any changes?



Thank you in advance.



Rohan Agarwal



SRIKANTH SHANKAR MATRUBAI'S REPLY

Dear Rohan,
It is very heartening to see that such an young age, you have started investing in Mutual Funds, and that too with a Long Term view. Good Going.
You seem to have tilted your investment too much towards Large Cap Funds. While Large Cap Funds do protect you form Downside when the Market is Bearish (like we are in now), but they tend to lag a bit compared to Diversified Equity Funds over a Longer Term.
With Age on your side and consider your long term view, you can consider investing in some Good Diversified Equity Funds which also have some exposure to Mid-Cap and Stocks which are Growth Oriented. These Funds do not have any Cap bias nor Sector bias, concentrating purely on Growth and can thus give you Better return than Pure Large Funds.
While you can continue your investment in HDFC Growth Fund, you may reduce your sip in Birla sunlife Frontline Equity fund and DSPML Top 100 Fund.
With the 2000 saved, you can invest in
DWS Investment Opportunity Fund
fidelity Equity Fund
Best of luck,
Srikanth Shankar Matrubai.

Funds for children education

Atul Patel asked
Dear Srikanth,
Suggest me a good MF and SIP to my childrens. So after 5-7 yrs they will get some good amt for their education.

SRIKANTH SHANKAR MATRUBAI replied
Dear Atul Patel,
It would have been better if you had also given your investment amount and target amount for me to suggest suitably. Anyway, as a Thumb Rule, I have suggested the following funds. Before investing in them, do secure your future by taking adequate Term Insurance Cover. And then, you can invest in the following.
Consider investing in Large Cap Funds and Diversified Equity Funds,
Birla Sunlife Equity Fund
DSPML Top 100 Fund
DWS Tax Saving Fund
Fidelity Equity Fund
HDFC Prudence Fund
Sundaram Select Focus fund

Preferably invest through sips. While investing in Birla Sunlife Equity Fund, invest through Century Sip, to avail Free Life Insurance.
Also, in DWs Tax Saving fund, you will be getting Added Bonus of Free life Insurance of 5 times your Investment.
True, combining Insurance with Investment is not wise. But that is for ULIPs, which are very costly, non-transperanct and high charges.
Best of luck,
Srikanth shankar Matrubai

Mutual Fund's Free Insurance Stopped by SEBI

Dear all,
Insurance providers have decided not to provide group cover any more for mutual funds schemes offering insurance from the 1st of October.
the Insurance Lobby is very strong. They saw that their income is shrinking due to massive shifting of money from Insurance to Mutual Funds offering Free Insurance.
People have realised that ULIPs have high cost, non-flexible, high exit loads, hidden charges and have started shifting to Mutual Funds. The Insurance Players could not stand seeing the big loss staring at them.
Why should you pay 35% commission to Insurance Agent and a paltry 2% to Mutual Fund Agent?.
SEBI has always been favouring Insurance vis a vis Mutual Funds. Mutual Funds cant hire services of an Celebrity while the Insurance Agents can and do this to screw Lakhs of gullible Investors. Shame on IRDA for stopping something which is for the Good for the Investing Public.
Are they not doing a disservice to Investors?. Why is SEBI silent?.
We need to protest this decision by IRDA and ensure a Level playing field for Mutual Funds and Insurance.
If the Mutual Funds should not sell Insurance, well and Good, the Insurance Companies also should not sell ULIPs!!!.

is DSPML World Gold Fund a Good buy?

Lot of my clients keep asking me Whether They should Buy DSP/AIG World Gold Fund. Here is my take on the same.
Investing in gold stocks allows investors to benefit from the growth potential of equities and the strong fundamentals of gold. This is the fund’s main investment premise. When gold prices rise, the operating profits of gold mining companies rise by a greater proportion. As a result, stocks of gold mining companies can significantly outperform gold as an asset class.

I personally believe that it is a product that combines the two themes of geographical diversification and an indirect exposure to gold. Another notable feature of the parent fund is that it has beaten its benchmark FTSE Goldmines index for the past twelve years. DSP ML is upbeat about the prospects of gold as increasing inflation across the globe and also the volatility in financial markets will mean an increased emphasis on gold as a safe asset class. Also, the fund house holds the view that it is within the realms of possibility that central banks of the world may revert back to the gold standard for parking their reserves. For example, if China decides to shift even 1% of its reserves to gold, it could mean a rise in global demand by 18%.
While all this is almost akin to speculation about the future, the fact remains that this fund does offer a cross border diversification to investors who are largely invested in domestic equity

While the price of gold is off its earlier highs, the fund continues to predict a strong rally in gold prices on the back of significant investment demand from Central Banks and investors, as they respond to rising inflation and a weakening dollar.

According to Black Rock, stocks in its portfolio have also underperformed because some mining companies have hedged their recovery prices and have not been able to really benefit from rising prices. With many of these companies de-hedging, they will be better placed to capitalise on the next leg of the gold rally.
While everyone is entitled to his/her opinion, I feel that having a Small Percentage of DSPML/AIG World Gold Fund in your portfolio will only enhance the returns and asset allocation and diversification in your portfolio.
Best of luck,
Srikanth Shankar Matrubai.

Why SIP is Good

Systematic Investment Plans (SIPs) are much misunderstood. For one, investors often mistake SIPs as an investment avenue rather than a mode of investing in mutual funds. Then there are investors who invest in SIPs expecting quick results without fully appreciating the need to invest via SIPs for the long-term.

In an earlier article, we discussed how SIPs are perceived incorrectly by many investors as standalone investments. This explains why one of the most common queries we receive on the website is – which is the best SIP? Unfortunately, these investors have not been educated by their investment advisors about SIPs i.e. SIPs are only a mode of investing and not an independent investment avenue.

Minimum tenure of an SIP
Another misconception investors have about SIPs is with regards to the minimum tenure. Most fund houses have a minimum SIP tenure of 6 months. This leads investors to believe that 6 months is the ideal time frame for investing via SIPs (just like a lot of investors invest Rs 5,000 in mutual funds simply because that is the minimum investment amount for several mutual fund schemes).

In our view, investors should ideally invest via SIPs over at least 2-3 years. This way they can exploit the most critical benefit of an SIP – rupee cost averaging. Let’s understand how this is possible.

For an SIP to deliver the goods, it must witness a falling market. This way the investor can average out his cost of purchase. If the investor does not witness a downturn, i.e. he is only exposed to a market rally, the average purchase cost of his SIP will rise over a period of time.

SIPs in a rising market

Month of investment	NAV (Rs)	No. of Units
January	11.00	45.45
February	12.00	41.67
March	12.50	40.00
April	12.90	38.76
May	13.25	37.74
June	13.40	37.31
Avg. purchase cost of 6 SIPs	Rs 12.45

(The example is for illustrative purpose only.
We have assumed that the SIP is done on the first trading day of the month; SIP amount is Rs 500.)

In the above table the average purchase cost of the SIP is Rs 12.45. Clearly, the SIP has not worked in the investor’s favour. Why is that? Because if he had instead invested lumpsum in January, his purchase cost would have been Rs 11.00 as opposed to the average purchase cost of Rs 12.45 over a 6-month period.

SIPs in a falling market

Month of investment	NAV (Rs)	No. of units
January	11.00	45.45
February	12.00	41.67
March	12.50	40.00
April	12.90	38.76
May	13.25	37.74
June	13.40	37.31
July	12.10	41.32
August	11.20	44.64
September	10.30	48.54
October	10.10	49.50
November	10.50	47.62
December	10.20	49.02
Avg. purchase cost of 12 SIPs	Rs 11.50

(The example is for illustrative purpose only.
We have assumed that the SIP is done on the first trading day of the month; SIP amount is Rs 500.)

However, if the investor had opted for a longer investment tenure of say 12 months, he could have benefited from greater fluctuations in the mutual fund’s NAV. These fluctuations which arise over a market cycle lower the average purchase cost of the SIP over the long-term.

This is apparent from the above illustration. As is evident from the table, if the investor had taken an SIP for 12 months (instead of 6 months) his average purchase cost would have declined to Rs 11.50. Compare this with the average purchase cost of Rs 12.45 for a 6-month SIP.

It can be argued that there is no way for the investor to know when there is likely to be a turnaround in the markets (in this case a downturn). That is exactly our point. Since the investor does not know when markets will fall (and lower his average purchase cost), he must opt for a longer SIP tenure. Or at least he must manage his investments in a manner so that when his existing SIP terminates without witnessing a dip in stock markets, he can extend it further. This way should the markets fall, his SIP can benefit from a dip in the mutual fund NAV which in turn will lower his average purchase cost.

Points to remember before opting for an SIP

1) Ironically, while SIPs are meant to eliminate market-timing, investors must opt for a long-enough SIP tenure so as to ‘time’ the market downturn.

2) SIPs are equally beneficial in a falling market. Most investors believe that lumpsum investments (as opposed to SIPs) prove more beneficial in a falling market. This is only partly true. Having an SIP in operation during a falling market can ensure that investors stand to benefit should markets fall even further.

Buy GOLD NOW!!!!

Dear all,

Gold's inflation-adjusted price — $2,270 — has not yet been reached, indicating the price of gold can nearly TRIPLE from current levels.

If history is any guide, then there is nearly a 100% certainty that gold will reach $2,270 before gold's bull market is over. And quite possibly, even higher! Here's why.

Keep in mind that throughout history, asset classes always reach their inflation-adjusted price. They wax and wane, falling behind the inflation curve at times, and at other times, catching up and exceeding their inflation-adjusted prices.

That's true of all asset classes, be they bonds, stocks, commodities.

This is especially true in the post-1971 period when paper money's relationship with real money has been severed via the elimination of the gold standard.

Supply and demand fundamentals support a continuing bull market in gold.

In fact, demand for gold in dollar volume reached a record high in the second quarter of this year. Meanwhile, supplies seem to be tightening further.

South African gold production plunged more than 12%. And many major gold miners are now forecasting a slide in production for the second half of this year.

Plus, central bank sales of gold are running at their lowest level since 1999.

Both short and long term, the demand/supply equation in gold favors a long-term bull market
So, now that you have decided to invest in Gold. My advise is Do not invest in Gold ETFs.
In Gold ETFs you give your money to a fund manager and the fund manager buys gold only from certain place and keeps it at a certain place which is mandated by the law. So it is the only investment made by the fund company and the NAV of the fund that one owns, moves in line with the market price of the gold; less the expenses. So in that sense all gold ETFs are equal; they just do as well or as bad as any other. So fund selection of ETF is not important.
The Better alternative would be to invest in Funds like DSP BlackRock World Gold Fund and/or AIG World Gold Fund. Both these funds invest in Gold Mining Stocks Worldwide and have a terrific track record. As the Stocks tend to have a higher co-relation to Gold, they tend to rise higher than Gold and Fall faster than Gold. But, with Gold forming a Bottom and Looking Very Bullish, these Are the Funds you MUST invest in.
Don't miss this Golden Opportunity.
Best of luck,
Srikanth shankar Matrubai.

Your money is SAFE

Many of the invetors are worried about the future of their investments in foreign funds. For the benefit of you and other worried investors I have copied the latest article of Dhirendra Kumar below.
In the last two days, I've received a large number of queries from worried investors about the safety of the money they've invested in funds run by foreign-owned asset management companies. This includes both wholly foreign owned ones like AIG, Fidelity and Franklin as well as those that are joint-ventures with foreign companies like DSP Merrill Lynch, Birla Sun Life, ICICI Prudential and Sundaram BNP-Paribas.

On the face of it such worries are understandable. Over the last few months, many big names have been revealed to be quite hollow. As I'm writing these words, news has come in that the AIG group, the world's largest insurer has, for all practical purposes, been nationalised by the US government, The company's top management is in the process of being sacked. Lehman Brothers has gone bankrupt and Merrill Lynch has been sold off in a distress sale to Bank of America. Who's next? Nobody knows.

Here's what has been worrying investors: Tomorrow if Fidelity or Franklin or Prudential or Sun Life or BNP-Paribas or Morgan Stanley or any of the others go bankrupt or are nationalised or otherwise cease to exist, will there be any impact on the money that you've invested in their fund?

The simple answer is that your money is safe. In Indian law and accounting, there's a sharp distinction between the fund company's own money and the investors' money that it is managing. Investors' money does not even go to the fund company. The money stays with a custodian and is just invested under the instructions of the AMC's fund manager.

To take a concrete example, let us see what would have happened if Lehman Brothers had owned a mutual fund company in India. When Lehman went bankrupt, its creditors would have a right to the AMC's assets (like its offices for example). The creditors would not have the right to investors' money. In such a case, the AMC would either get a new owner or it would be wound up. In either case, investors would get their money back.

Of course, I'm not discussing any losses that your investments would make as a result of declining markets. That market risk of dropping NAVs remains for all funds whether they are run by an Indian AMC or a foreign one.

Courtesy: Valueresearchonlin

In addition, please read the following extract from the workbook published by Association of Mutual Funds of India.

QUOTE
A mutual fund in India is constituted in the form of a Public Trust created under the Indian Trusts Act, 1882. It should be understood that a mutual fund is just a pass-through vehicle. Under the Indian Trusts Act, the Trust or the Fund has no independent legal capacity itself, rather it is the Trustee or Trustees who have the legal capacity and therefore all acts in relation to the trust are taken on its behalf by the Trustees. The trustees hold the unit-holders money in fiduciary capacity, i.e., the money belongs to the unit holders and is entrusted to the fund for the purpose of investment. In legal parlance, the investors or the unit-holders are the beneficial owners of the investments held by the Trust, even as these investments are held in the name of the trustees on a day-to-day basis.
UNQUOTE

The investments being managed by the mutual fund does not belong to them hence no one can claim them except the unit holders who invested in the fund. Investors of mutual funds need not panic about their investments even if the mutual fund files for bankruptcy.

Best of luck,
SRIKANTH SHANKAR MATRUBAI

AIG clarification

AIG Mutual fund house people have sent me this letter to clarify their latest position.


AIG Investments
Sept 16 Letter

Dear Investor:

I am writing to update you on some of the news regarding AIG and the recent actions of the principal rating agencies. Notwithstanding the downgrades announced last evening, the company is working aggressively on various fronts to improve liquidity during this unsettling period.

While AIG has not yet reached a complete solution, we expect that the New York and Pennsylvania insurance departments will provide the necessary approvals to allow AIG to unlock $20 billion in liquidity already within the enterprise through the exchange of capital between certain AIG businesses. This is a positive first step for the company, and we are working on additional measures.

I want to remind you that AIG Investments client assets are not impacted by AIG’s current market situation and our commitment to protecting our client’s investments is unwavering.

Our Investor-to-Investor commitments are made by AIG’s various insurance subsidiaries, which are strong, well-positioned businesses in diverse markets around the world. These companies are well capitalized and meet or exceed regulatory capital requirements in their respective markets.

Our investment teams remain in place and are focused solely on managing your assets. As you know, their incentives are based primarily on the success of their strategies, not AIG’s results. They are working hard to ensure that the impact of the current turmoil is mitigated and are working to find opportunities in the current crisis.

Many of you have also inquired about our Houston employees in the wake of Hurricane Ike. I am pleased to report that while there has been extensive damage to the area, all of our employees and their families are safe and accounted for. In addition, back-up operations and contingency plans are being exercised to ensure the continuity of the businesses.

I will continue to communicate important developments as they become available.

Best regards,

Win Neuger

...

Dont worry about DSPML Mutual Fund

Dear Guest,
Meryll Lynch has already sold its Mutual funds business to Blackrock Investments worldwide including India long back.
DSP people have applied for Name change from DSP Merill Lynch to BlackRock, but it has yet to be approved.
Friends, there is nothing to be fear about your investments in DSPML Mutual Funds.
So, in effect, DSPMeryll Lynch is actually DSP Black Rock Mutual Fund. They have not effected the name change.
I hope this will set your fears to rest.
Regards,
Srikanth shankar Matrubai...

Stay Calm - Don't Panic

Dear All

Lately the financial markets have been witnessing huge turmoil. While some of them are reasonable, there are others which are founded based on rumors. In any case, the inevitable reaction is panic

So what has really caused the panic button to be hit across the globe. What has prompted Gold to rally the fastest in a decade? What prompted China to cut its lending rates and reserve requirement? The one answer to the many questions is The US.

We are all aware of the subprime crisis that took toll of the US economy and almost pushed it to the brink of recession. Almost 7 months after the Bear Sterns fiasco, US had sufficient time to reassess its financial health. But seemed like complacency took over as was evident from Lehman going bankrupt. This was followed by the Merrill, the biggest US retail broker selling off to Bank Of America

Bombshells in the US are still waiting to explode – timing could be anyone’s guess. This seems to be one of the worst financial crisis since the Great Depression.

AIG’s assistance package announced by the US Fed was done with expectation of some calm to prevail in the market. But markets can behave irrational for periods longer than you could remain solvent. The Dow has plunged nearly 450 points yesterday to close at 10600 levels. With markets anticipating “the next AIG” the S&P 500 financial index fell almost 9% yesterday. Adding fuel to the fire is the US Housing market, which is at the epicenter of this financial turmoil. Housing data is pointing to further declines. Critical housing indicators would be watched by the Fed if financial markets continue to unravel as they have in coming days

What does an investor do in such markets???

Well that’s a million dollar question indeed. To quote the legendary Sir John Templeton – “ Bull markets are born in pessimism, grow on skepticism, mature on optimisim and die of euphoria”

Investors across asset classes continue to hinge on hope and await signs of recovery. Let me reiterate here that Indian markets are reacting to a global event – and INDIA IS NOT THE CAUSE OF SUCH AN EVENT. Hence one needs to have loads of patience in such markets.

Flight for safety is supreme in such market conditions and the same can be found in Liquid and Liquid Plus funds. FMPs are best suited in such market conditions as they help mitigate interest rate risks to a large extent

India has come out of such crises in the past like we saw in the case of the Asian Crisis. The regulators are vigilant and are actively monitoring the financial markets to ward off any ominous tendencies

On a final note – Be cautious and watchful of the markets – but panic is not the solution

Too many ULIPs

Mr. Arun wrote :
Dear Shrikant

Just gone through your blog. I would like to take ur advice on my investment. I am working abroad and planning to be here for another couple of years. I have the LIC policies of 5L,2.5L and prulife of 10L apart from that LIC ULIP market plus G of 10k halfyearly.
MF SIP 3000 each on DSP Merril Lynch TIGER Reg G , SBI Magnum Contra G, Kotak Opp G all six months old and 30K one time in ICICI prud infra G fund.

I am 30 now and just married. I can save 20K avg monthly. Now I see all my MFs are in red for the past couple of months. Can you tell me whether I am in right track of investment. Till I am abroad I can do investment taking risk. . Also I read that invest in many funds is not a good method.
Can you please guide me with funds I shud invest.

Thanks
arun


SRIKANTH SHANKAR MATRUBAI replied
Dear Arun,
Yet again, same mistake of treating Insurance as Investment. You can see my other posts and you will know that I hate ULIPs. Ulips are the most mis-sold (conned should be the word) product in this country. These Ulips have very little transperancy, high premium charges, tough exit conditions. Yet, people, even educated ones fall in the trap laid by the Insurance Sales Agents and blindly invest in them.
You continue your investment in Endowment Policies and Term Insurance products. But, please please, STOP and SELL your ULIP investments immediately and instead invest in Mutual funds, which are cheaper, more transperant and definitely easy to exit.
Stay invested in the Lumpsum investment of ICICI Infrastructure Fund for now. Do review again around March, when the conditions could be slightly for Infrastructure Stocks and thus, this fund.
Continue your 3000 sip in both SBI Magnum Contra Fund and Kotak Opportunities Fund for now. Both are good funds with a reasonable track record. Note that SBI Magnum Contra Fund is not a Contra Fund, with more than 60% in Large Cap Holdings.
However, you can discontinue your further sips in DSPML Tiger Fund, as Infrastructure Funds may take time to deliver returns and also, you have sufficient exposure to Infrastructure Sector through ICICI Infrastructure Fund also.
You should add a Good Large Cap Fund to your portfolio, which is sorely lacking now, especially in these Bearish Times. Do consider investing in
Birla Sunlife Frontline Equity Fund
DSPML Top 100 Fund
HDFC Top 200 Fund
HSBC Equity Fund
Sundaram Select Focus Fund
Of course, age is on your side. But that does not mean, you can invest in only High Risk High Return Funds. You do need to have sufficient Large Cap and diversified Fund in your portfolio.
Best of luck,
Srikanth shankar Matrubai

20 lakhs in 3 years for Child Education.

Ms. Priya Sharma wrote :

Hi,

I accidently came across your blog while searching for advice on mutual funds. I want your help in investment. I have the following investment

AVIVA little master- 2000/ m SIP

Bajaj alliance unit gain-4000/m SIP

HDFC tax saver-2000/m SIP

PPF-2000/m SIP

The first two are ment for my kids education they are now 6 and 2

I can invest 15000/ month . Can you suggest some funds.

I require 20 laks after 3 years. I have 7 laks now

thanking you

priya

SRIKANTH SHANKAR MATRUBAI advised ::

Hai Priya,
I am very sorry to say this, but your investments are not at all good. Your investments in Aviva Little Master and Bajaj Allianz Unit Gain are both ULIPs. And as you may already be knowing, ULIPs are the most missold (conned by agents, I should say) products in this country. These ULIPs have high Premium Charges which eat into your returns and thus leave you with lesser returns when compared with Mutual Funds. If you can consider stopping and cancelling these Ulips, please do so immediately. They are a waste of your money.
You have much better options and alternatives for investing for your children's education. First of all, take adequate Term Insurance to give security to your family. Then start investing in Good Diversified Equity funds.
Your investment in HDFC Tax Saver is a good one. Stay invested in the fund for now. However, you can stop future sips and rather consider investing in DWS Tax Saving Fund. This Fund has not only a good track record in its short history, but also as a added bonus give FREE LIFE INSURANCE 5 TIMES YOUR INVESTMENT.
For your 15000 per month investment, You can consider investing in the following funds.
1000 * 2 (two different dates) in birla sunlife Frontline Equity Fund (2000)
500 * 3 (3 different dates ) in Fidelity Equity Fund (1500)
1000 * 1 in JM contra fund (1000)
1000 * 2 in Kotak K30 Fund (2000) (Invest through Kotak Star Kid Facility to avail Free Life Insurance)
1000 * 2 (2 different dates) in HDFC Prudence Fund (2000)
1000 * 2 in HSBC equity Fund (2000)
500 * 2 in Reliance Growth Fund (1000)
500 * 2 in Reliance Natural Resources Fund (1000)
500 * 3 in Sundaram Select Focus Fund (1500)
1000 * 1 in Tata Pure Equity Fund (1000)

Achieving 20 Lakhs in 3 years is bit difficult, even after considering that you have 7 lakhs right now. So, in effect, to get another 13 lakhs in 3 years, even at 20% returns, you need to invest nearly 27000 per month.
So, either scale down your expectation or increase your monthly sip outgo.
Best of luck,
Srikanth Shankar Matrubai.

How is DSML Tiger and Reliance Power Fund?

Mr.Arun Jhakar wrote :

Hi Srikanth,

I have read few of your replies on goodfundadvisor bolgs regarding Mutual Funds and was thinking to get a second opinion about my funds from your side.

I have got following two MF in my portfolio where i am investing Rs 5000 (each of them) per month (SIP) since Nov 2007.

1) DSPML T.I.G.E.R. Fund

2) Reliance Diversified Power Sector Fund

As of now the absolute return is -21% and the current situation for DSP Meryll Lynch as well as Power sector is not too good.

What do you suggest -

-- should i continue or stop the SIP and wait.

-- should i invest in some other MF to get better results.

Can you please reply this mail with your opinion or send me the link where i can check your comment.

Thanking in anticipation!!

Arun

SRIKANTH SHANKAR MATRUBAI advised :

Dear Arun Jakhar,
Both of your investments are into Sector/Theme Funds, which I strongly advise AGAINST investing, especially if these are going to be the only funds in your portfolio. And the fact that you started your sip in the PEAK of the Bull Run has only compounded your losses.
You need to immediately stop your sips in Both the Funds. You need to invest in Diversified Equity Funds. Sector/Theme Funds do have huge volatility and tend to outperform the markets when the trend goes against their invested Sectors. Diversified Funds on the other hand, as their name suggests invest in a Basket of Stocks across Sectors and thus insulated from any Downturn in any sector. And also, most importantly, note that if the Fund Manager Does find any Sector (Power, Infrastructure, in your case) attractive, he WILL invest in these sectors.
DSPML Tiger Fund has a Better Track Record than most funds in Infrastructure Sector. But still, you would be better off by investing in DSPML Equity Fund or DSPML Top 100 Fund.
Your other investment is in Reliance Diversified Power Sector Fund. This fund had a great run. However, the same is very unlikely to be repeated in future. Even an Average Return should be difficult from this fund. This fund has the highest Corpus among all the funds in India right now. Servicing such huge corpus in these bearish times, should be a very very challenging task for the Fund Manager.
You can stop the sip in this fund and can consider investing in Birla sunlife Equity Fund and/or Fidelity Equity Fund. These funds would not only protect you from downside but also have the potential to give you more return than the funds you are currently invested in.
BEst of luck,
Srikanth Shankar Matrubai

Why Even Cheaper Crude is Grim News

One of my friends Mr.Vinod Tantri forwarded this article he picked up from the net.

Why Even Cheaper Oil Is Grim News

The sharp drop in crude prices is further fallout from the Wall Street crisis and evidence of economic weakness

Getty Images

Any other day, Wall Street would have cheered a 5.4% drop in oil prices. That decline for crude futures, however, was accompanied by a nearly 5% tumble for the Standard & Poor's 500 index on Sept. 15. Stocks—as was made painfully clear to investors—are no longer trading inversely with oil prices.

Analysts say that investors, who had been pouring funds into commodities as an alternative to creaky stock markets, are now pulling out of the market. The withdrawal reflects a fear that the economic picture will remain bleak, causing reduced demand in both developed and developing countries. The price of a barrel of West Texas Intermediate crude oil slid $5.47, to settle at $95.71 on the New York Mercantile Exchange (CME). It was the first settlement below $100 per barrel in six months. "A weak economy and financial turmoil mean lower demand; that means lower [oil] prices," says Craig Pirrong, professor of finance and energy markets at the Bauer College of Business at the University of Houston.

The impetus for the Sept. 12 drop was the implosion (BusinessWeek.com, 9/14/08) of several investment banks. Lehman Brothers (LEH) filed for bankruptcy protection, while Merrill Lynch (MER) agreed to be acquired by Bank of America (BAC). Insurance giant American International Group (AIG) is hunting emergency financing as it attempts to stay in business.

Trumping the Bulls

Lehman, Merrill Lynch, and other institutional investors helped fuel the commodities boom of the past year. As funds flooded the commodities markets, the price of oil, precious metals, and grains hit historic highs. But now the economic crisis is trumping bullish signals in the oil market, such as production halted by Hurricane Ike and simmering tensions between Russia and Georgia (BusinessWeek, 9/11/08). Energy stocks also took a hit on Sept. 15. Exxon Mobil (XOM) fell 5.5%, to 73; BP (BP) slid 5.2%, to 51; Chevron (CVX) shed almost 5%, to 80; and ConocoPhillips (COP) dropped 6.4%, to 68.

According to a report released on Sept. 10 by Michael Masters, principal of Masters Capital Management, institutional investors "began a mass stampede for the exits" in mid-July of commodities indexes like the S&P Goldman Sachs Commodity Index. Investors withdrew about $39 billion from the index, resulting in the selling of about 127 million barrels of West Texas Intermediate crude futures.

The strengthening of the dollar has also eroded oil prices. Stephen Schork, an energy consultant in Villanova, Pa., and editor of The Schork Report, a daily energy newsletter, says that investors have moved from commodities to currencies markets as an alternative to the stock market. The upshot is that, for now, commodities and equities markets will fall together. "The fact that oil is low at the same time of the stock market reflects the depth of the financial setback we're facing," says Peter Beutel, president of Cameron Hanover, an energy risk-management firm in New Canaan, Conn.

Is $70 Oil a Possibility?

In other words, the severity of the economic crisis means that lower oil prices are seen as a harbinger of an economic slowdown, not an increase in purchasing power that would lift equities. "The poor economy weakens the price of crude, and causes traders to sell; in turn, their selling weakens the price of crude," says Joel Fingerman, president of FundamentalAnalytics.com, a Chicago energy consulting firm. He sees oil heading to $70 or $80 a barrel in the near future.

If lower oil prices are here to stay, will consumers return to old patterns of consuming more petroleum products? Many analysts think not. "The demand destruction is irreversible," says Schork. "It's a situation of once bitten, twice shy. Prices may be down for now, but consumers know they could eventually move high again."

Thank you Vinod Tantri for the article.

Letter in Deccan Chronicle

LETTER PUBLISHED IN DECCAN CHRONICLE ON 15 SEP 2008

Need better coordination
Sir,
The numerous potholes, uneven roads, and absence of asphalting on most of the city roads make commuting extremely difficult. The city badly needs effective policies and effective coordination between various agencies. Coordination between the BBMP, BWSSB and KPTCL is also needed for carrying out any work that may affect the infrastructure. It is often seen that after a road has been repaired, the BWSSB decides to dig up the road to lay sewage lines. Heavy vehicles should be allowed inside the city only at night. Also, roads should be asphalted only after monsoon so that they will last longer. Potholes should preferably be filled with cement.
Srikanth Shankar Matrubai,
Bengaluru

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Reliance Diversified Power Sector Fund

mr.SHAKTI wrote :
which you suggest to change the reliance power sector fund ? Its going to give good returns in next 2 years.

shakti

SRIKANTH SHANKAR MATRUBAI'S REPLY
Dear Shakti,
I do not agree with you. I feel Reliance Diversified Power Sector Fund will face challenging and tough time going forward. The Power Sector itself is facing problems with regard to Raw Materials. The valuations are also on the higher side inspite of recent meltdown.
Most importantly, Reliance Diversified Power Sector Fund is the biggest fund in the country. With such a big corpus, and that too with a mandate to invest only in Power and Related Sectors, the fund will rather be an underperformer, at best a Average Performer. I suggest you to invest in this fund, only if are absolutely convinced about the Power Story and willing to ride out the volatility and stay invested for at least 5 - 7 years.
Otherwise, there are many other Good funds which are better placed than Reliance Diversified Power Sector fund.
Best of luck,
Srikanth Shankar Matrubai

Shall I take another Insurance?

VEERU wrote :
Hi Srikanth,

I get a chance to see u r blog http://goodfundadvisor.blogspot.com. It
gives me good information related to the investment.
Please advise me on my investments. I am 32 (Male). I am having 2
kids. 1st KID 4 years and 2nd KID 2 months old.

My Investments:

I am paying nearly 1 Lac rupees towards an Insurance(Jeevan Sree +
endowment) for me+wife +1st Kid for every year. I have invested 1 Lac
rupees in Shares directly. Since Market is down and value also come
down. I am planning to keep them for long term. My concern is one of
friend suggested me insurance for 2nd Child "TATA-AIG Maha life Gold"
Policy where i need to pay 1 Lac per year almost 12 years.

After that every year till his life 1 Lac per year. After, all i went
thru u r blog i am planning to think my friends advice. I am not
interested in that. I am planning to switch to mutual funds + SIP.
Please suggest me which funds will suit to me and I can invest 5K to
7.5K per month in SIP. Totally these investments for long term use
only.

Thank you,
Veeru



SRIKANTH SHANKAR MATRUBAI'S REPLY ::::
Dear Veeru,
Paying 1 lac annualy, suggests to me, that you are already sufficiently insured. Of course, it can concluded only when I know your annual expense. The thumb rule says, One should insure for about 10 years of annual expenses. suppose your annual expense is say about 2 lakhs, then you should insure for 2 lakhs * 10 years == 20 lakhs.
And for Insurance, Term Insurance is the Best. The charges are very very low. Now that you already have Jeevan Shree + endowment, go for further insurance only if you feel you are underinsured. And go for only Term Insurance.
Remember INSURANCE IS NOT AN INVESTMENT.
My advise is give the "tata aig Maha life gold" a miss and say Tata to further Insurance.

I feel sad to see that your investment is down, it is of course expected, after the Big Correction that has happened. You have to keep them for Long Term, there is no other option. (All shares we buy, if it falls, automatically becomes Long Term Investment!!!)
Your mind veering towards Mutual Funds is but natural. Mutual Funds are the best avenue for Investments. They are transperanct, flexible, and give Best Returns among all the Asset Classes.
You can consider investing your 5k in the following funds which I feel should give you Above Average Returns.
1000 * 1 in Birla Sunlife Equity Fund (1000) (Investing via Century SIP will get you upto 1 lac Insurance Free)
1000 * 1 in DSPML Top 100 Fund (1000)
500 * 1 in DWS Tax Saving Fund (500) (Free Life Insurance of 5 times your investment is added Bonus)
500 * 1 in Fidelity Equity Fund (500)
1000 * 1 in HDFC Prudence Fund (1000)
250 * 2 in Reliance Natural Resources Fund (500)
250 * 2 in Sundaram Select Focus Fund (500)
This portfolio will have sufficient exposure to Large Cap, diversified Equity Fund and 1 Theme Fund (Reliance Natural Resources Fund)
Keep investing through sips.
Do review your investment every 6 months or so. Allow your funds to work by staying invested for long and reap the rewards.
Best of luck,
Srikanth Shankar Matrubai.

Where to invest 1600 per month?

Sir,
I am a student. thank you very much sir.
I saw a video clip on sundarambnpparibas.com, the fund manager explaining about mutual funds that by investing REGULARLY,DISCIPLINED and having PATIENCE without much worrying aboutmarket ups and downs for longterm period you are probably aCROREPATHI in near future.
Sir, now i am 22 years of age worried about my future needs and like to invest atleast 10 years from now.for this i can invest 1600/month.
I selected HDFC TOP 200 = 1000/month ,
SUNDARAM select focus = 300/month ,
RELIANCE growth/RSF fund = 300/mth.
On my previous query u suggested birla and fidelity equity funds,but both are not available in my area location(hyderabad) and the funds which i selected are at the same place(all 3 are main
branches which reduces entry load) so i choosed these funds.
Sir in a week i am going to start my SIP through these funds.based on your experience plz suggest on my funds bcoz i am very much worried about future needs(children,health...etc).
Sir,i have one more query for you,why experts suggests not to go for new funds? always go for well performed and well rated fund with good returns?even the new funds occupies the top position some or the other day?correct me sir if i am wrong.finally,plz have a clear look on my funds,is there any modification required?
thank you very much sir :)


SRIKANTH SHANKAR MATRUBAI REPLIED :::::

Dear Ajay Kumar
At the outset I congratulate on starting investments at such a young age of 22. And your choice as Mutual Funds, is absolutely bang on target.
Your choice of funds,
HDFC Top 200 Fund
Reliance Growth Fund
Sundaram Select Focus Fund
are very very good and deserve to be invested.
But your amount of 1600 is too small for you to become a crorepati even if you invest for 10 years. Your 1600 per month even at 20% CAGR will leave you with a end value of 5,50,898 only after 10 years.
But your "Small" amount of 1600 per month will get you Rs.1 CRORE after 25 years!!!.
If you want Rs.1 crore at end of 10 years, at 20% return, you need to invest 29000 per month for 10 years.
However, if you invest for 20 years, you need to invest only 4000 per month!!!.
I prefer Fidelity Equity/Birla Sunlife Equity Fund over Reliance Growth Fund due to the bungling corpus of Reliance Growth Fund which may hamper swift movements by the Fund Manager.
You should not worry about distance. After all, you are going to the Fund House only once. And, later on, maybe, maximum of 1 time a year, if at all.
NFOs are best avoided because they take time for money to be deployed, and also since they do not have track record, the fund manager's capability will also not be known. It is always better to know the performance over all types of market movement, which a NFO can't.
Best some NFOs can be considered if they are promising and different in their investment approach.

Best of luck,
Srikanth Shankar Matrubai

House of Pearl Fashions

Economic Times published a news article on House of pearl Fashions.

"

MUMBAI: Apparel firm House of Pearl Fashions Ltd said it was looking at more joint ventures in Europe to expand in that market, a senior official told television channel NDTV Profit. "We are in talks with a few companies..and it should materialize over the next quarter or so," Chief Financial Officer Rishi Vig said. The company owns 60 percent in a retail joint venture with European brand Lerros and plans to open 15 stores locally under the brand in FY09, he said. But it would take a couple of years for Lerros to contribute to the bottomline, Vig added. House of Pearl is also looking to double capacity in Indonesia and expand capacity in Bangladesh, Vig said. Shares were up 7.44 percent at 117.70 rupees in a weak Mumbai market. ET........ MY TAKE ON THE COMPANY :::: I have been eyeing this stock for quite some time. The strong Dollar should boost margins substantially and the Company should post a Big jump in their September Quarter numbers. the Company has been proactive of late in expanding their markets. Remember, this company came with an IPO priced at 625!!!! Long term investors can consider accumulating this stock. Best of luck, Srikanth Shankar Matrubai.

Retired Persons Portfolio

Mr.Anusirdi wrote :
Sir,
I am a retired and requires advice on tax payment.My income is ....
Monthly pension.... Rs.11000/-per month
Interest on FD... Rs. 6000/-per month
Rent on property... Rs 2000/-per month

My monthly expenditure on house loan Emi and insurance
House laon EMI... Rs. 5500/- per month
PLI... Rs. 1100/- per month

MY yearly premium of ULIP
Yearly... Rs 55000/- per anum
Can you help me in modifying my present MF portfolio for better returns after 2 years period
as on 26082008 Quantity Inv. Amt

Birla SL AAF -Conservative (D) 604.747 9,295
HDFC Prudence Fund (G) (2) 116.34 15,357
LIC MF Floater MIP-Plan A (AD) 2068.218 25,005
LIC MF Floating Rate Fund (G) 2272.767 27,991
LIC MF MIP (MD) 4885.623 50,029
Reliance Diver. Power - RP (G) (10) 148.744 10,000
Reliance Equity Fund - RP(G) 1000 10,000
Reliance Growth Fund - RP (G) (11) 61.347 24,000
Reliance Natural Resources (G) 977.995 10,000
Reliance Vision Fund - RP (G) (10) 43.137 10,000
SBI Magnum Contra Fund (G) (5) 1383.639 75,000
SBI Magnum Global Fund (D) (14) 1744.316 58,000
SBI Magnum Index Fund (G) 235.388 10,000
SBI Magnum Insta Cash (G) 546.747 10,000
SBI Magnum Tax Gain (D) 182.632 10,000
UTI VIS - Index Linked (D) 1759.201 25,000
Total : 379,677


SRIKANTH SHANKAR MATRUBAI'S REPLY ::::

Dear Anusirdi Sir,
As you are already on the wrong side of 50, it is better for you to be conservative while investing.
You do have good set of funds. Being a Retired Person having only Pension, Int on FDs and rent income, you need to supplement your income by investing in Large Cap Funds and Diversified Equity Funds, which you do have, but you could do with some Modification of your portfolio.
You have 16 funds in your portfolio, which is on the higher side. Your portfolio needs some trimming.
Immediately switch from Reliance Diversified Power Sector Fund to a Balanced Fund like Reliance Regular Savings Fund (Balanced option) or Large Cap fund like Reliance Vision Fund.
Also switch from SBI Global fund and SBI Index Fund to SBI Balanced Fund.
Redeem the following funds
LICMF Floating Rate Fund
Reliance Equity fund
SBI Insta Cash fund
UTI VIS Index Linked

From the proceeds you receive, you consider investing in Good conservative Large Cap Funds like
Birla Sunlife Frontline Equity Fund
DSPML Top 100 Fund
Sundaram Select Focus Fund
After effecting these changes, your portfolio will look something like this.
Birla SL AAF -Conservative
Birla Sunlife Frontline Equity fund
DSPML Top 100 Fund
HDFC Prudence Fund (G)
LIC MF Floater MIP-Plan A
LIC MF MIP (MD)
Reliance Growth Fund - RP (G)
Reliance Natural Resources (G)
Reliance Vision Fund - RP (G)
SBI Magnum Contra Fund (G)
SBI Magnum Balanced Fund
SBI Magnum Tax Gain (D) 182.632 10,000
Sundaram Select Focus Fund

Best of luck,
Srikanth shankar Matrubai

Mutual Fund Consolidation

Dear Srikanth,

I came across your blog last week and found it interesting
enough and thought of seeking your advice on my MF portfolio.

I have been investing in the following Mutual Funds since

January 2007 via SIP and wish to remain invested in them for the next 15-20
years.

Fund	Portfolio weight
DSPML Top 100 Equity Reg	3%
HDFC Equity	15%
HDFC Prudence	1%
HDFC Tax saver	5%
Kotak 30	3%
Magnum Contra	15%
Magnum Global	7%
Magnum Taxgain	6%
Reliance Diversified Power Sector Retail	7%
Reliance Growth	10%
Reliance Vision	14%
Sundaram BNP Paribas Select Midcap Reg	3%
Sundaram BNP Paribas Taxsaver	3%
Tata Infrastructure	8%

Please suggest as what needs to be done if I wish to consolidate
my portfolio to 5-7 diversified funds plus 1-2 ELSS funds.

Moreover, would this be the right time for portfolio consolidation

since most of the funds are in Red since January due to market downturn.

Warm Regards
Sandeep Nangrani



SRIKANTH SHANKAR MATRUBAI REPLIED
sharesher

Dear Sandeep,

As you have not given any details about yourself like age, risk profile, I have assumed you to be aged about 35 years with a medium risk profile considering your 15-20 years time horizon. It feels really good to see people like you who would like to stay invested for 15 years and above. Also, the fact that you are investing through sips only gladdens my heart more. Congratulations. With your kind of time horizon, you can definitely plan to earn high returns on your investments.

You have 31% exposure to one Single Fund House, Reliance. Normally, it is not considered good to have more than 20% exposure to 1 single Fund House.
Your exposure to HDFC Mutual Fund @ 21% is just about Ok.
You have 20% exposure to Large Caps.
You have 15% exposure to Sector Funds (Rel Diversified Power & Tata Infra)
You have 64% exposure to Diversified Equity funds (HDFC Equity, HDFC tax Saver, Magnum Contra, Magnum Global, Magnum Taxgain, Reliance Growth, Sundaram Midcap/Taxsaver).

You need to increase your exposure to Balanced Fund and also add an International fund to your portfolio.
You can stop your sip in the following funds and also cash out due to their below par performance and hazy future ::::
Magnum Global (Only the name is Global, but it invests in Indian Equities only)
Magnum Taxgain
Reliance Diversified Power Sector Fund (Bigger Corpus than even Reliance Growth and not so rosy picture for Power Sector)

Switch from HDFC Equity to HDFC Prudence Fund
Also switch from Sundaram Select Mid cap to Sundaram Select Focus Fund. (your mid-cap exposure will be taken care by Reliance Growth Fund).
Instead of Tata Infrastructure, you can invest in DSML tiger Fund which has wider range of stocks within Infra Sector (Financial, Power, Metals, etc) and is less vulnerable in a DownTrend as evidenced recently)
You can consider adding Fidelity International Opportunities Fund which would take care of your Intl Exposure.
For ELSS, you can continue to stay invested in HDFC Tax Saver and Sundaram Tax Saver, and for your furture ELSS tax funds, you can add
DWS TAx Saving Fund (Added Bonus is Free Life Insurance of 5 times your investment amount)
Birla sunlife Tax Relief 96 Fund
Lotus India Tax Plan
After effecting these changes, your portfolio will look like this :
Birla sunlife Tax Relief 96 Fund
DSPML Top 100 Fund
DSPML Tiger Fund
DWS Tax Saving Fund
Fidelity International Opportunities Fund
HDFC Prudence Fund
HDFC Tax Saver Fund
Lotus India Tax Plan
SBI Magnum Contra Fund
Reliance Growth Fund
Reliance Vision Fund
Sundaram Select Focus Fund
sundaram Tax Saver
Best of luck,
Srikanth Shankar Matrubai