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