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