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Best Balanced Mutual Fund Schemes (Equity Oriented) | Review

Last updated: June 27, 2017 | by

Are you working hard to keep everything in your life BALANCED? I am sure, who does not want to lead a balanced life.. Staying balanced in the midst of your life is a true feat.

A well balanced life is very much essential for personal effectiveness, peace of mind and living well.  We all would like to maintain a balance between professional and personal life. Both are equally important to lead a successful, happy and healthier life. We need to have a right and well-balanced diet to be healthy and fit.

Investing in Balanced Mutual Funds is not much different. Balanced funds are also known as Hybrid Mutual Funds. Personally I prefer investing in balanced funds to achieve my medium and long-term goals. I am a strong advocate of Balanced Funds. (Read : My Mutual Fund Portfolio)

Whether you are a new or an experienced investor, investing in balanced funds can be fruitful. They can give you Diversified Equity funds like Returns but with a lower risk profile.

Last year in the month of June (2016), I had published an article on ‘ Best Balanced Mutual Fund Schemes ’. One year gone by, so let’s review the performance of these top performing balanced funds and let’s have a look at the new list. But, before that, let’s discuss on the basics of Balanced Funds.

What are Balanced (or) Hybrid Mutual Funds?

Mutual funds are broadly classified as either Equity or Debt,based on where the funds are invested.

  • Equity funds primarily invest in stocks/shares.
  • Debt funds primarily invest in Bonds, Government securities and Fixed interest bearing instruments. (Related reading : ‘Types of Debt Funds‘)
  • BALANCED FUNDS invest in both equity and debt instruments.

What are different types of Balanced Funds?

Balanced mutual funds can be Equity oriented or Debt oriented hybrid plans.Balanced Mutual Funds Hybrid Equity oriented Debt Oriented Mutual Fund Schemes

If the average equity exposure of a balanced fund is more than 60% and the remaining 40% is in debt products then it is treated as an Equity Oriented Balanced Fund. This means major portion of the fund’s assets are invested in equity (stocks).

If the average debt exposure is around 60% and equity is 40% then these funds are treated as Balanced funds – Debt oriented. (These proportions can vary among different balanced fund schemes).

As per my last review on Top performing Balanced Funds, I had earlier suggested below schemes ;

  • HDFC Balanced Fund
  • TATA Balanced Fund
  • ICICI Prudential Balanced Fund
  • Birla Sun life Balanced ’95 Fund
  • SBI Magnum Balanced Fund
  • HDFC Children’s Gift Fund

As HDFC Children’s Gift Fund may not be suitable to everyone, so I have included a regular balanced fund in its place, which is L&T Prudence. (Last year, I have suggested to keep an eye on L&T Prudence’s performance.)

If you have invested in any of the above Funds, you may continue with your investments in them.

Top Performing & Best Balanced Mutual Fund Schemes & Returns Analysis

Below are the top and consistent performances under Balanced (Equity oriented) category ;

Best Balanced Funds 5 star top rated equity oriented hybrid mutual fund schemes hdfc balanced fund

  • There are around 61 Balanced (Equity oriented) Schemes. The Category’s average returns have been around 12% for the last 5 years.
  • HDFC Balanced fund has been one of the best consistent performer under ‘Hybrid-Equity’ fund category. The fund’s last ten year record is as good as some of the best pure Equity funds. This fund generally allocates 70% of its corpus to Equities and the remaining balance is invested in Debt Securities. The fund’s investment strategy has been aggressive when it comes to allocation of corpus to mid/small stocks, when compared to its peers. This fund has a very low portfolio turnover (Portfolio turnover is a measure of how frequently assets within a fund are bought and sold by the managers). The last 5 and 10 year returns are 19% and 16% respectively.
  • Birla Sunlife’s Balanced Fund (’95) is one of the oldest available balanced funds and has also been a consistent performer. This fund has an allocation of around 71% (May 2017) of its corpus to Equities and around 19% has been invested in Debt oriented securities. Around 23% of its Equity allocation has been invested in Banking & Financial Services sector.
  • L&T Prudence Fund, though relatively a new entrant in this category, it has been performing really well for the last few years or so. It has beaten its benchmark and peers by impressive margins over the last four years. The Fund’s risk grade is ‘below average’ and return grade is ‘above average’. It has an allocation of around 69% to Equities. The fund’s investment strategy has been a ‘multi-cap’ approach with slightly higher allocation to Mid/small cap stocks. Whereas, it does not take much risk with Debt securities and primarily allocates debt corpus to less risky bets like Sovereign Debt, Bonds & Treasury investments. We need to see how this fund performs in a bear market (as this fund has been launched in 2011 only).
  • ICICI Prudential Balanced Fund has an Equity allocation of around 65% and around 28% of its corpus is invested in Debt securities. Its performance during the last 5 year period has been quite impressive.
  • SBI Magnum Balanced Fund has been inconsistent until 2011 (with patches of bad and good performances). However, this fund has been performing well since 2011-12.  This fund typically maintains a 75-25 equity-debt mix. The equity part is multi-cap, with 50% allocation to Large cap stocks and 50% allocation to mid/small cap stocks. In the Debt portion, about 50% is invested in G-Secs.
  • TATA Balanced fund has been one of the star performers under Balanced Funds category. However, its performance has not been up to the mark for the last 1-2 years. The fund’s three and five year returns have beaten its benchmark by around 10% and its category by 5% points. But the margin of out-performance has narrowed in the last 1 -2 years. Its standard deviation has been slowly inching higher. Nevertheless, it is still one of the best consistent performers for the last 10 years or so. Its 10 year returns have been around 14%, next best to HDFC Balanced fund.
  • Two more balanced funds to watch out for are Franklin India Balanced Fund & DSP Blackrock Balanced Fund. Let’s keep a track of their performances.

Best Equity Oriented Balanced Mutual Fund Schemes & Risk Ratios

Let’s have a look at the Risk ratios of these top performing & best Balanced Mutual Fund Schemes; Best Balanced Mutual Fund Schemes 2017 2018 Top performing Equity oriented hybrid balanced mutual funds risk ratios

(Sorted based on overall ‘Fund Risk Grade’) (Source : Valueresearchonline.com)

In case, you have to pick a balanced fund out of these top performing balanced funds as per your requirements, you need to give importance to both returns and measures of volatility. You may analyze various ratios as given in the above image and select the one which is the best for you.

Ideally, the fund should have lower Standard Deviation, low Beta, high Alpha and so on..

Suggest you to kindly go through my article ‘how to pick right mutual fund scheme?‘ for the detailed explanation on various types of risk ratios.

The main benefits of investing in a balanced fund are;

  • Diversification : The funds are invested in both equity and debt financial securities leading to diversification of investments.
  • Asset Allocation & Re-balance : Balanced funds regularly re-balance the portfolio based on market conditions & asset allocation limits. An investor is, thus, saved the hassle of manually re-balancing the portfolio. But it is prudent not to remain invested in these funds till your reach your Financial Goal target year. You may have to switch to safer investment avenues as you reach your target year. (Related reading : ‘List of best Investment Options‘)
  • Low volatility : Balanced funds are less risky compared to pure Equity funds. Equity portion will provide the capital appreciation through stock prices appreciation and dividend income. Whereas, Debt portion can provide stability through interest income and appreciation in Bond prices.
  • Long Term Capital Gains : In terms of taxation, the balanced mutual funds that invest at least 65% in equity (Equity oriented) attract no tax liability on Long Term Capital Gains. The units of these funds should be held for more than 12 months. (Related Reading : ‘Capital Gains on Mutual Fund & Tax implications‘)
  • You can consider balanced funds for your medium to long-term goals like Retirement Planning or for Kid’s Higher Education goal planning.

Have you invested in any of the balanced mutual fund schemes? Do you believe that one should include a balanced fund in his/her long term MF portfolio? Kindly share your views. Cheers!

(References : moneycontrol.com, valueresearchonline.com, morningstar.in & freefincal.com)  (Post Published on : 19-June-2017)

Sreekanth Reddy:

Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 11 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions." "Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. These should not be construed as investment advice or legal opinion."

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  • i had invested in the erstwhile HDFC Prudence growth and dividend too. It had given me good returns for the last two years. After the midcap collapse, dividend tax and merger i am not very sure of the perfomance of the new avtar of this MF. Now its known as HDFC balanced advantage fund. i could see too many negatives. The AUM has reduced to 1500 Cr and the fundmanager has changed.
    Would request your views
    Thanks
    Regards
    Anil

      • My objective is monthly income and wealth accumulation/principal protection. HDFC prudence had been doing well in both. It was giving me a dividend of 1% monthly plus around 4% annual appreciation. But from April onwards i have observed a reduction in monthly income, probably due to dividend distribution tax, and it has started eating into my capital

        • Dear Anil,
          If one your investment objectives is ‘capital protection’ then it is advisable not to invest in Mutual Funds especially Equity oriented ones.

  • This article cleared all my doubts regarding Balanced Mutual Funds. It has been really very helpful. Thank you.

  • Hello Sreekanth,

    Wanted to know as to where do i invest 1 lac lumpsum (recd. as security deposit towards lease of apt.) considering the fact that i would need to return the same if the lease not continued post 11 mths.

    Please advise on the same.

    Have a nice evening.
    Roy

  • Hi Sree,

    I have been following your articles for over a year now and must thank you for the valuable advise to the readers of your informative blogs.

    I am 40 years old and for last almost one year investing 5K each thru SIPs in Hdfc balanced, ICICI focused bluechip, SBI Multicap, icici value discovery and hdfc midcap opp. funds for different financial goals.

    I have received a lumpsum amount as bonus and also one of the bank FD has matured recently, totaling to about 12 Lacs. Could you please advise where to invest this sum for a medium term horizon of 4-6 years?

    • Dear Raj,
      You may invest this amount through STP route in HDFC balanced fund and ICICI Bluechip fund.
      You can pick Liquid funds from respective fund houses, invest the lump sum amount in them and set up STPs to equity funds.
      For ex : ICICI Pru Liquid plan -> STP -> ICICI Focused
      HDFC Liquid fund -> HDFC Balanced fund.

      Thank you for your appreciation!

      • Thanks, Sree.

        And for how many months STP should be set for this amount? And for both the funds the date of STP should be same or different?

        By the way, I am not Ajharudin:)

        • Dear Raj,
          Somehow, I sense that this year the equity markets can be very volatile till the time of next General elections.
          You may follow two strategies, one -> STP approach and second -> Invest manually the additional lump sum amounts in your portfolio of existing funds.
          You may set up STPs for 12 months or so.

  • Hi,

    I am following your blog for sometime now. Just need your advice on the below portfolio i am having
    1> HDFC balanced Fund – 2k – i am running it for last 1 year
    2> Franklin India PRIMA PLUS-GROWTH – 2k – i am running it for last 1 year (total 3 year)
    3> Franklin India BLUECHIP FUND-GROWTH – 2k – i am running it for last 1 year (total 3 year)

    I am planning to invest another 8k in SIP- please suggest me something which will give good return in next 5 year time. Also suggest me if I can take Franklin Funds out and invest in somewhere else or continue with those. I am currently 36 year old.

    Thank you in advance.

  • The markets are correcting so is it the right time to top up balanced funds or Large cap or mid cap. Each of them has corrected in the increasing order. Balanced fund the least and small cap the most. What would you advise?

    • Dear Anil,
      If one has a very long term investment time-frame, can surely make additional investments in Mid/Small or diversified equity funds.
      Personally, I investing additional sums in a small cap fund and in an ELSS fund for my long term goal+tax saving.

  • Dear sir,

    I want to invest in ultra short term ,funds and small cap funds ,my time horizon for small cap will be 5 yrs ,’which ultra short term fund will best to invest now ,whether Franklin india UST -superinstitutional fund and L and T floating rate fund will be ok to invest or suggest the UST Fund ,to invest in current sceneario , Can we invest in small cap fund at this time ,Thinking to invest in L and T emerging buisness fund? is it right move. to invest. Kindly suggest.

    • Dear Prakash,
      You may go ahead with the mentioned Franklin fund.
      Suggest you to stay invested for long term (more than 5 years) in case you choose to invest in a Small cap fund.
      L&T emerging businesss fund is a decent bet (has allocation of around 42% to small cap stocks ).
      Other funds are :
      Franklin Smaller Cos fund (allocation of around 43% to small cap stocks).
      SBI Small & Mid cap fund (allocation of around 64% to small cap stocks).

      Kindly read:
      How to pick right mutual fund scheme based on Risk Ratios?
      MF Portfolio overlap analysis tools

      • Dear sreekanth,

        Thanks for the reply ,and your suggestion on the investment options, My major doubt at this time is ,

        Market going at higher speed , day to day, Whether can we expect any correction at this time for any

        drastic change ,Or can we invest at this time point with out waiting for correction,

        For eg: unit price of ICICI Prud balanced fund last two days before is 140.04 ,but even though correction happened in its price today ,its units price selling at 141.130 compartively lesser than yesterday 141.135 but higher than previous day.

        Kindly clarify my doubt

        • Dear Prakash,
          It is next to impossible to predict the market movements and to TIME the markets.
          In case, one has near term goals and have been investing in Equities adequately, he/she can re-balance the portfolio (can book some profits and invest in safer bets).
          If one is investing for long-term goals, suggest to continue with the investments. In case, markets correct a bit, consider it as an opportunity to invest more (if possible).

  • Hi,

    I’m a regular follower of your blog, and appreciate your work. For a long term portfolio, i prefer SIP and threshold re balancing. When market is undervalued i buy more units, but what should i do when market is over valued?

    Change my asset allocation to say 80:20 debt:eq and stop SIP until market PE correction happens or
    Leave asset allocation as its and stop SIP or
    Leave asset allocation as its and continue SIP or

    • Dear Sri,
      Thank you for following my blog posts.
      Personally, I do not re-balance my portfolio for my long-term goals.
      For ex: If have say 10+ year time-frame from now, let us invest as much as possible in Equity oriented funds and give them the time to grow.
      In case your target goals are say within 5 years from now, may be you can start re-balancing the portfolio.

  • Hi sreekanth ,
    I have 20 lakhs as lumps sum ,I have invested already in Franklin India blue Chip -direct growth ,Motilol oswal most focussed multicap 35 , most focussed 25 fund, and I think to invest in Balanced and small cap funds ,can I go with which funds ,Time frame 2 years and 7 years ,

  • Hi Sreekanth,

    SIP is going on for following two mutual for last 3 years:
    ICICI Tax saver – SIP of 3000 INR
    ICICI Value Discovery Fund – Growth – SIP of 4000 INR

    Both has given me around 9-10% interest in 3 years. I am confused shall I keep continue with these MFs for 2 more years or stop these SIPs and invest in some other better MFs

      • Hi Sreekanth,
        I don’t need money in near future. So its for long term only. But its not giving me high returns so I was thinking may be I can stop SIP for both (or for any one) and invest in some other funds. ya 3 years are over so locking period for ELSS is already over. Not sure should I continue or look for some other funds.

        Regards,
        Saurabh

        • Dear Saurabh,
          You may discontinue with Tax saver fund and opt for other ELSS fund (if tax saving is one of your objectives) like Franklin Taxshield / Birla Tax relief 96.
          If ELSS is not your choice, you may pick a mid-cap fund for long term.

  • Hi Sreekanth,

    I have been following your blog from a long time, thanks for sharing this less known information. I have started some of the investments recently only. I am 30 years old married man please review my portpholio all plans are direct taken from my cams online .
    SIPs ->
    1. ABSL tax relief 96 – 4000
    2. DSP black rock tax saver fund – 4000
    3. HDFC small & mid cap fund – 300
    4. L&T emerging business – 3000
    5. IDFC Infrastructure fund – 3000
    6. Kotak select focus – 3000

    One time investments (not stated SIPs.)
    1. ICICI Prud. banking & financial fund – 5000
    2. ABSL small & mid cap – 5000

    Also, Please suggest should I switch one time investments to other existing SIPs. I some short term and some long term goals so which SIPs should be taken for respective goals.

      • Hi Sreekanthm

        Thanks fro the quick response. first of all there is a correction at fund no.3. it is
        HDFC mid cap opportunity fund NOT HDFC small & mid cap fund – 3000

        My Goals are –
        1. I have some very short term goals 3 to 4 years. (Home purchase), I am saving amount for that too other than SIPs, but I will need some SIPs amount (from where I should take 3-4 lakhs ).
        2. Mid term goal – 8 to 10 years. (land purchase at my village 12 – 15 lakhs)
        3. Long term goal – 15-20 year (child education etc 15- 20 laks)
        4. For retirement – I am thinking EPF+ EPS+NPS will be sufficient (should be around 25 lakhs and pension of 10k \ month).

        Also,
        1. I am thinking to move\switch the one time invested amount i.e. 5000 from

        # ICIC Prud Bank –to-> IDFC infrastructure fund.
        # ABSL small & mid cap –to-> ABSL tax reliefe 96.

        and will stop the ICICI and ABSL small & mid cap funds. Please suggest if I am thinking is correct.
        2. After time (6 month or 1 year) am thinking to take a balanced fund (HDFC Balanced fund) so should I take that or do a top up on existing funds(if yes which one I should choose).

        thanks,

        • Dear Nandkishore,
          1 – You may consider Short term debt funds or conservative MIP funds for short term accumulation (Home purchase).
          2 & 3 – Your existing portfolio can be fine. Yes, you can add one Balanced fund in place of multiple allocations to mid/small cap funds.
          You may totally avoid investing in Infra fund, as most of the regular funds do have allocations to Infra based stocks.

          Kindly read :
          Retirement planning calculator
          What is 200 Day moving average?

  • Hi Sir

    Myself Siva .I have been investing in MF from 2.5 years .my portfolio is as below .
    SBI SMALL&MIDCAP FUND
    FI HIGH GROWTH COMPANIES FU
    FI SMALLER COMPANIES FUND
    L&T INDIA VALUE FUND
    MIRAEASSET EMERGING BLUE CHIP
    MO MOST FOCUSSED MULTICAP35
    AXIS LONG-TERM EQUITY.

    I am investing in direct growth plan and 5000 rupees in each fund in SIP

    I would like to invest 15000 rupees /month more so please suggest if i have to add new MF or can I increase SIP in existing funds.Also let me know if my portfolio is good as I am looking for long-term (15 years) and want to accumulate 4 crore by that time.

    iam 36 year old now.i have term insurance for 2 cr . Health insurance covered by employer apart from that i have health insurance for 25 lakhs/ year.
    I have a kind of investment (some thing like ppf) in company of around 45 lakhs and it will keep increasing by 6.5 lakhs per year . This money is actually invested in company stocks.

    After paying all emi’s (for flat and plots) iam still left with 2 lakhs per month of savings .i have a bank balance of 5 lakhs as emergency fund .

    My father is 72 year old .he is exservicemen.all medical expenses for him are covered by government.

    This is my present situation . I have 5 year old daughter and 3 year old son .my goql is to create wealth for thwir education (graduation or similar).so i can invest for a time frame of 15 years .

    Please give your suggestions regarding my portfolio (amendmenta/addition / deletion of funds)
    Thanx in advance
    Siva.

  • Hi Srikanth,

    I am planning my finances for 2018 and once again need your advice and expertise on doing so.

    Specifically, I am looking at investing an additional 12000 per month in Mutual Funds through SIPs for 8-10 year period towards wealth generation goals.
    Please also advise in case any reshuffle is needed in existing SIP holdings.

    Also, I would request you to please advise in case my coverage on insurance fronts is OK.
    I have always valued and 100% trusted your advice and am once again reaching out for your immense expertise.

    Family: Myself (35), Wife(32), Dependent Mother(68).

    Income: Myself- INR 125000 PM. Wife- INR 100000 PM.Wife also gets VPF deducted equal to PF.
    Fixed Expenses- House Rent+Maintenance- 32000 PM, Car EMI- 11000 PM, PPF- 1000 PM, SIP- 38000 PM.

    Assets
    1. Current SBA Account Balance- 5 lacs
    2. Locked Savings (iWish + SBI e term deposits)- 10 lacs
    3. Family Home worth 1.5 CR in a tier 2 city(no plans of sale in near future)

    Insurance Covers:
    1. Organization Life Covers from both mine and wife’s organization worth 1Cr each.
    2. Organization Health Covers for full family from both our companies worth- 5Lakh and 7Lakh
    3. My Term Plan: LIC e-term plan for 50 Lacs cover 35 year term (stared Feb 2016)
    4. Wife’s Term Plan: ICICI Pru iProtect Smart for 50 lacs cover 30 year term (started Jan 2016)
    5. My Personal Accident Cover: Max Bupa Health Assurance Accident Care- 50 lacs cover
    6. Wife’s Personal Accident Cover: Max Bupa Health Assurance Accident Care- 35 lacs cover
    7. Wife and Me Joint Health Plan: Max Bupa Health Companion Family Floater- 10 lacs cover

    Mutual Funds SIP Investment:
    (there are several from ICICI because that was when I had just started initially on a friend’s advice with no prior knowledge)
    1. 5000 PM- started Jan 2017 – Tata Balanced Fund (G)
    2. 5000 PM- started Jan 2016- SBI Magnum MidCap (G)
    3. 10000 PM- started Dec 2016- Franklin India Tax Shield (G)
    4. 5000 PM- started Dec 2016- SBI BlueChip (G)
    5. 5000 PM- started March 2017- ICICI Prudential Long Term Equity Fund (Tax Saving) – Direct Plan – Growth
    6. 1000 PM- started Aug 2015- ICICI Prudential Long Term Equity Fund (Tax Saving)- Growth
    7. 2000 PM- started Aug 2015- ICICI Prudential Focused Bluechip Equity Fund – Growth
    8. 1000 PM- started Feb 2016- ICICI Prudential Value Discovery Fund – Direct Plan – Growth
    9. 2000 PM- started Aug 2015- ICICI Prudential Value Discovery Fund – Growth
    10. 2000 PM- started Aug 2015- ICICI Prudential Balanced Fund – Growth

    Thanks a lot in advance

    Gaurav

    • Dear Gaurav,
      1 – Locked savings of Rs 10 Lakh – Is this part of your Contingency planning?
      2 – Is your mother covered under Company’s health insurance plan?
      3 – You currently own investments in multiple funds from same fund categories like two balanced funds, two large cap funds, two ELSS funds..
      You may discontinue ICICI LTE elss fund and continue with Franklin Taxshield.
      You may discontinue your investments in TATA balanced fund.
      SBI bluechip and ICICI Focused – both are decent funds. You may check their portfolios overlap.
      Kindly continue with ICICI Value discovery fund.
      SBI mid-cap has been an average performer in mid/small fund category.

      • Hi Srikanth,
        Thanks!
        1. 10Lakhs- is towards possible downpayment contribution to my brother’s flat purchase next year.
        2. Yes, mother is covered in company’s health plan.
        3. Thanks for advice- ICICI LTE is wife’s tax saver and Franklin is mine. Should she continue or switch to Franklin? I will discontinue TATA Balanced fund. So I have 5000 from Tata balanced fund, plus an additional 12000 per month which I wish to invest. What would be the ideal option to invest this 18000 per month?

        Once again, thanks for all the help and guidance.

        Best
        Gaurav Sharma

        • Dear Gaurav,
          Kindly go through my article on ‘ Best ELSS funds‘.
          You may make additional investments in your existing funds itself.
          If you can afford to take risk, can add one more Mid/small cap fund. For ex : HDFC Mid-cap / Mirae Emerging bluechip etc.

  • DEAR SIR,

    I AM 48 YRS. OLD AND WOULD LIKE TO INVEST IN HDFC RETIREMENT SAVINGS FUND & TATA RETIREMENT SAVINGS FUND- MODERATE PLAN THROUGH SIP TO GET A CORPUS FUND OF A LUMP SUM AMT. AT THE AGE OF 60.

    NOW, I NEED YOUR VALUABLE SUGGESTIONS.

    THANKING YOU AND LOOKING FOR YOUR BRIGHT FUTURE & PROSPECT.

    PL. GO AHEAD AND KEEP IT UP.

  • Hi,
    I have been advised by a company to do sip in below mentioned funds. For a moderate risk investor, please advice

    Asset Class Fund
    Large Cap IDBI India Top 100 Equity Fund – Growth
    Mid Cap Motilal Oswal M0st focused MidCap 30 Fund – Growth
    Index IDBI Nifty Index Fund – Growth
    MidTerm Corp Bond DHFL Pramerica Medium Term Income Fund
    GILT IDFC GSF – Provident Fund – Growth
    Commodities Birla Sun Life Gold Fund – Growth
    ShortTerm Corp Bond Principal Short Term Income Fund – Growth

      • I asked the same question and they replied-
        //”In case of Equity fund we majorly check

        1.What is total exposure of that asset class.

        2.What is risk adjusted return earned in the funds, expense ratio etc.

        In case of Debt Funds

        1.What is the investment category and the grading for the securities which the fund manager is handling.

        2.What is the maturity of these securities.”//

        Investment objective is wealth creation. Time frame could be 5-15 yrs.
        The past performance of almost all the funds they suggested seems poor. I want to invest in 2 parts-
        1. Lumpsum of several lakhs in a comparatively safer area. 3-5 yrs. Return expected 8-12%. Should this be debt funds or Dynamic Asset Allocation Funds or any other?
        2. SIPs in equity that I discussed above.

  • I am a retired person . I would like to invest my corpus in MFs. I would like a combination of Balanced and debt funds. i Was advised that since the market is high its better to put the money in a liquid fund and wait for a correction. Would like to know if this is sound advise. Also the balanced fund and debt fund schemes you would recommend, and in what proportions. i dont need a dividend only growth schemes
    Thanks in advance

      • i am earning a pension by which i am able to maintain my life now. This corpus is for beating the inflation and saving for future. Time frame three to five years
        Thanks

        • Dear Anil ji,
          If your time frame is around 5 years and objective is ‘wealth accumulation’.
          You can invest the lump sum corpus in Liquid funds and then set up STPs (Systematic transfer plans) from liquid funds to respective Equity funds.
          You may consider couple of Balanced funds.
          Ex : HDFC Liquid fund to HDFC balanced fund.

  • Mr.Sreekanth, I used to have around 47 lakhs all invested in ICICI Prudential Balanced Fund – Monthly Dividend since May’2017. Then it was Crisil rating Rank 1, after 2 months or so it dropped to Rank 2, and now it dropped to Rank 3. Received dividends for the past 6 months. NAV was high last week, So I redeemed and and did an profit booking and made up around 20% in returns after paying 1% exit load & 15% short term profit gain tax.

    My question now, can you advice me where can I put my 47 lakhs invested in what funds? short term / long term it does not reallty matter. As long as the Crisil Rankings are good, returns are good and riskometer is good too 🙂

        • Dear Vik..Is accumulation of corpus or regular income (dividend), which is your investment objective?
          If your objective is to accumulate corpus in around 5 years time-frame..You may again invest in balanced fund.

          I believe that ICICI Pru balanced fund is a decent one, kindly do not churn your portfolio on short term performances.

          • Invesetment objective. I already have other sourcces of income on regular monthly basis. I do not mind investing on Balanced Fund once again. Can you advice any good balanced funds? or any other funds you might feel suitable for my Invesetment objective.

            The main reason I pulled out from ICICI pru Balanced Fund Monthly Dividend was not just short term gain, but the Ranking from 1 to 2 then to 3. So I had to be alert and careful with my corpus.

            thank you.

              • noted with thanks. Yesterday I have invested in L&T Emerging Businesses Fund – Regular Plan (G) >> 20 lakhs. Can you advice any others for my remaining 27 lakhs?

  • Please evaluate my Portfolio:

    Aditya Birla SL Equity Fund (2000)
    Reliance Tax saver (2000)
    Axis long term equity (2000)
    SBI Blue chip (2000)
    Reliance small cap (2000).
    Aditya Birla SL Advantage Fund (2000)

    I am selecting right fund to invest for long term 10-15 years. Please suggest me !

  • Dear Shreekanth,

    Your blogs are really helpful and informative.Crisp and precise content. Keep sharing your thoughts.

    I am planning to start a separate MF portfolio for my wife. She currently has savings of 1 lakh and the investment time frame is 12 years. Planning to increase the amount slowly.For Debt i am planning to invest seperately in PPF and BL Sun life MIP II wealth 25 Plan

    1) Currently I have shortlisted below funds.
    Large Cap (50%): BL Sunlife Top 100 or Mirae Asset India opportunities
    Mid Cap (25%) : Hdfc Mid Cap opportunities or Principal emerging blue chip fund or L&T Mid cap fund
    Small cap (25%): Franklin Smaller cos or L&T emerging business funds

    Please review and provide your suggestions on the above list and any other funds apart from the above list is absolutely fine.I am going to choose one from each large/mid and small cap based on the suggestions.

    2) Is Bulk investing good idea and is it the right time to invest or should we need to wait couple of months for MF consolidation

    3) For some of the funds (Hdfc Mid cap,HDFC Top 200,BLSL Frontline quity,Icici discovery & HDFC Balanced) the AUM size is > 15000 CR. Is it going to be any risk due to increase in AUM or this AUM increase is not a concern.

    Thanks
    Dandu

    • Dear Dandu,
      We can category Birla MIP fund as an hybrid fund (not completely a debt category). Kindly read : MIP funds – review.
      Large cap : You may consider Birla fund
      Mid-cap : HDFC mid cap can be considered
      Small cap : Franklin fund

      You may allocate some amount to diversified equity fund as well.

      2 – Kindly read :
      SIP Vs Lump sum
      What is 200 DMA?

      3 – I have always believed that when i am investing in an actively managed equity scheme, the AUM size should not be a factor to invest and my fund manager should have the capability to handle such AUMs.
      Till date, I have not invested in a scheme looking at the AUM size (big/small),given more importance to consistency of returns over the years.
      The size can be a factor in case when we are investing in a Debt fund Scheme.

  • and another quick query –

    which debt fund should be chosen for a lump-sum investment of 5 Lacs for starting an STP in Hdfc /ICICI balanced fund?

      • Thanks Sree.

        I have invested 2.5 L in hdfc liquid fund and started STP to hdfc balance fund.

        For balance 2.5L, i was thinking of parking 2.5L in hdfc medium terms opp. fund and buying hdfc balanced fund only on Dips. Have chosen this debt fund as the returns are better than liquid fund. Therefore just in case, the amount remains invested, the returns would be slightly better.

        Thought of this as the markets are on very high levels and there could be a correction in the short term.

        What would you suggest?

  • Hello Sreekanth,

    In Jan’15. I had invested 1.5 Lacs in lumpsum in ICICI Pru Equity Income Fund – Growth. This is a balanced fund which was lunched in Nov-2014.

    After nearly 3 years of launch, if i look at its performance, it stands out among the laggards with just 9% annual return. Whereas, all goods funds in balanced category have given a return of over 15% and some of them even 25% also!

    What could be the reason for such dismal performance from a reputed fund house ..and what would be your advise for me?

    Should i hold this fund or switch over to a better one? Investment horizon is another minimum 5 years.

    thanks…and looking forward to your suggestion.

    Regards, UK

    • Dear UK,
      There is no guarenteed that all schemes will perform well.
      Each scheme has its own investment objective and strategy. Sometimes it works and sometimes it may not.
      Also, different funds are managed by different fund managers.

      Do note that its advisable to stick to schemes with long-track records, which have performed consistently well across different market cycles. ICICI Equity income fund belongs to Equity oriented balanced funds, this is relatively new fund. Given a choice, I would pick a consistent performer like HDFC balanced fund than a new fund.

      You may switch to HDFC Balanced fund.

  • hello shrikant

    my investment

    axis long term (elss) 2.5 k
    franklin taxshield (elss) 2.5 k

    idfc classic equity fund (multicap) 5 k
    franklin bluechip (large cap) 5k

    investment period – 5 years

    pls suggest any more mutual fund should be added or modify existing funds.
    can u suggest any other instruments to be added in my portfolio.

    thanks in advance

  • Hi, thank you for guiding us.

    My query is wrt to the taking additional advantage over ‘just parking money in maxgain home account (to get 8.7 % interest)’.

    I do get 18000 income for my flat on which I do pay 39K EMI, instead of parking this amount in maxgain I wanted invest it MF’s through SIP to avail additional advantage ( I knew the risk in MF’s)
    I plat to invest this 18K in 2 or 3 funds (at leat 5 years), 10k in balanced rest 8k in multicap or as you suggested.
    please suggest me good funds.
    just to give you more info..I am carrying SIPs of 13k for my long term goals (since 2 years). They are rel.regular savings, kotak select focus, sbi multicap rel. small cap etc.,
    Please suggest me the right funds may be from existing or new funds. I hope your suggestions will help me to repay my home loan.
    regards
    ram.

  • Hi Sreekanth,

    I am a new entrant to Mutual fund investments planning to invest in medium & long term. With the P/E ratio approximately at 26, is it right time for me to invest in SIPs (or) should I wait for it to reduce?

    In general what does P/E ratio signify?

    • Dear Arun,
      It is calculated by dividing the current market price of the stock by its earning per share (EPS). PE ratio can be calculated for a stock as well as say for an Index.
      I assume you are referring to index EP at 26. So, how to calculate this PE?
      For ex : Nifty PE ratio measures the average PE ratio of the Nifty 50 companies covered by the Nifty Index.

      If you are investing for long term and that too through a SIP (regular intervals), you may start investing and do not wait to TIME the markets!

  • Hello sir

    My portfolio

    My monthly salary is 55k and my age is 27
    Currently working in state govt .
    I have taken hdfc term plan
    Investing 6k per month in PPF(tax saving plus wealth creation)
    2k sip in HDFC balanced fund for 20 yrs
    2K sip in sbi bluechip fund for 15 yrs
    2k sip in axis long term equity (tax saving)
    1k hdfc mid cap fund for wealth creation .
    10K per month in RD for emergency fund .

    Sir i want u to review my investment profile .
    I will top up 1K in all this mf after 2 years

  • Sir
    my spouse and I are in secured job. we are investing Rs 51000 in following SIPs. My horizon is 12+ years, aim is wealth creation with moderate to aggressive.

    Large:
    SBI blue chip 5k
    FI Bluechip 4k
    Mirae Opportunites fund 4k

    Multi cap
    I Pru Value discovery 4k
    FI High grwoth companies 5k

    Midcap
    Mirae Emerging bluechip 4k
    HDFC midcap opportunites 4k

    Smallcap
    DSPBR Microcap 4k

    Balanced
    HDFC Balanced 8k

    Debt and arbitrage
    I Pru Liquid 3k
    I pru equity arbitrage 2k
    Quantum Dynamic Bond fund 4k

    In addition we have compulsory NPS (Rs 14000 each per month) and also invest in PPF of atleast 50k per annum each.

    Kindly comment on selection of my funds as well as asset allocation

  • Hi Sreekanth, As you mentioned in other invest lumpsum when the market is relatively low, So, Do you recommend investing lumpsum amount in midcap or small cap mutual funds in current market situation or should i wait for some more time. I have a 1lakh in hand which i am planning to invest. I don’t have any urgency. I am looking for long term 10 years. What is the best mode i can go for?
    Thanks in advance
    Madhu

    • Dear Madhu,
      You may set-up STP (systematic transfer plan) and move the lump sum amount from a liquid fund to equity oriented funds.
      Kindly do not wait to TIME the markets, as your investment is for long-term…

  • Hi Sree

    I have around 2 Lakhs to invest for a period of 1 year.

    Around 1 lakh i want to invest in a moderate risk option with higher returns.Liquidity : within 15 days is fine

    Around 50000 i would like to invest in an arbitrage fund.(hoping they offer more returns than fixeddeposits and liquid funds)

    Around 50000 i would like to invest in some aggressive investment options which can give me very high returns.

    Please suggest me some good funds for each category.

    If you have any other suggestion for investing this amount for a period of 6months to 1 year please suggest that too.
    (For around 75% amount i’m ready to take moderate risk and remaining 25% can take high risk).

  • Hello Sreekanth.
    I am having a bank FD of Rs. Nine Lakh earning 8% annual interest for a duration of 6 years. Interest income of Rs 6,000 comes to me monthly I come in 30 %tax bracket.
    In order to avoid tax and to preserve the initial capital,I wish to go for a Balanced fund – Direct, Growth with monthly SWAP withdrawal @9%per annum which works out to a monthly withdrawal of Rs 6750. I can keep the fund for next 6 years or more

    Do you think, I am doing the right thing. Do you think my initial capital is unlikely to erode and my SWAP will come from increase in NAV?.Should I opt for HDFC or ICICI or L&T or dividedmy portfolio equally among these three mutual funds

    Regards

    Vinod

    • Dear Vinod,
      May I know if monthly/periodic withdrawal is your requirement or you just want to withdraw certain amount from equity fund??
      If fixed period income is your requirement, considering your tax bracket, and if you can afford to take moderate risk – Setting up SWP from a Balanced fund is effective and makes sense.
      Time-frame of 6 years is fine.
      However, there is no guaranteed that capital erosion will not happen, as returns from MFs are not fixed.

      “When you’re invested for the long term, your average return becomes much more stable over time and it’s less likely that you’ll lose money. Various studies show that as we lengthen our investment horizon, the average annual rate of return over that timeline becomes less variable.”

      • Thanks Sreekanth for your valuable guidance. I am thinking of foreclosing my bank FD and investing Rs 9 Lakh in Balanced fund with SWP of Rs 6750 every month. My time horizon of holding the fund is above 6 years.
        Can you kindly advise whether I Should I opt for HDFC balanced fund, or ICICI Prudential balanced or L&T prudential or alternately divide my portfolio equally among these three mutual funds

  • Hey Sreekanth ,
    I have made one portfolio for my Mother too !!
    1) SBI bluechip : 2000pm
    2) ICICI Pru Balanced : 1000pm
    3) Principal Emerging Bluechip / HDFC Mid Cap : 1000pm
    4) Franklin India High Growth Company Fund : 1000pm

    ELSS:
    Birla Tax Relief 96 fund : 5000pm
    Tata India Tax Saving / Franklin Tax Shield : 5000pm

    Please advice if any corrections needed
    Investment horizon is around 10-12 Years
    and For How long we must continue ELSS funds (each SIP) for a decent return

  • After reading your blog and 2-3 interactions with you…I have made this Portfolio for me (My age :22 years)
    Birla Frontline Eq Fund-G : 3000pm
    HDFC BALANCED FUND : 1000pm
    SBI MAGNUM MULTICAP :1000pm
    Mirae Emerging Blue Chip : 1000pm
    Franklin small company fund : 1000pm

    ELSS :
    Franklin India Tax Shield : 5000pm
    Axis long term Equity : 5000pm

    Overlapping are more among Large-Multi , Large-ELSS , Large-Balanced but that still less than 40%
    For rest combinations , it is below 20% overlap. Please suggest if i should change any fund
    Time horizon is more than 15 years.

  • Dear Sreekanth,

    Thanks a ton for for the valuable and continuous articles on personal finance. I am 32 and have an unavoidable fixed deposits/debt based investments of 13K/month and accordingly want to invest in Equity. My aim is long term wealth creation and I have zeroed on to below portfolio. Pls comment/recommend necessary changes:

    1. Axis Long term Equity Fund – Growth/Direct – 5000/month.
    2. Mirae Asset Emerging Bluechip Fund – Growth/Direct Plan – 5000/month.
    3.ICICI Prudential Value Discovery Fund – Growth/Direct Plan – 4000/month.

      • No, Axis LTE is not for tax savings. Sec 80(C) is already crossing without mutual funds. Please comment on Axis LTE . I also request you to recommend me 1 additional fund(apart from the above mentioned three funds) for Rs.5000/month SIP.

        • Dear Sunny,
          If so, instead of Axis fund you may add one more diversified equity fund or a mid-cap fund. Ex: Franklin High growth companies fund or HDFC Mid-cap opp.
          And one equity oriented balanced fund to your portfolio.

          • Hi Sreekanth,

            After taking your advice and a little bit of study, I have short-listed following 5 funds for long term (>15 years) wealth creation:

            Diversified:
            1. Motilal Oswal Focused Multicap 35 Fund-G/D – 5000/month.
            2. ICICI Prudential Value Discovery Fund-G/D- 5000/month.

            Mid Cap
            3. Mirae Asset Emerging BlueChip-G/D – 5000/month.
            4. Franklin India Prima Fund-G/D- 5000/month.

            Small Cap
            5. DSP Black Rock Micro-Cap Fund-G/D- 5000/month.

            I have an unavoidable debt related investments of 13K/month(PPF etc). I request you to kindly re-assess and recommend any modifications in the above mentioned plan-A for 25K/month in pure equity funds. Separately, I also request you to remove any one of the above funds for a Plan B for 20k/Month.

            Thank you.

  • Hi Sir,
    Thanks for giving these helpful details, I have prepared a folio for long horizon (5+years), can u please suggest t if this is fine.
    1. UTI Mid Cap Fund – Direct Plan (G) -Rs 2000
    2. ICICI Prudential Value Discovery Fund – Direct Plan (G) – Rs 1500
    3. ICICI Prudential Top 100 Fund – Direct Plan (G) -Rs 3000
    4. ICICI Prudential Mid Cap Fund – Direct Plan (G) – Rs 1500
    5. HDFC Mid-Cap Opportunities Fund – Direct Plan (G) – Rs 1500

    I am planning for HDFC balanced fund to add in folio with Rs 4000. Is this correct decision?
    If any changes are required please suggest. Thanks for your help.

  • Dear Sir,

    I have very less capital of Rs. 80k which i want to invest in Mutual fund for short term goal i.e 1 year and don’t go through the Bank since interest rates are very low in bank..

    Pl advice some MF’S name as well as category so that i can earn better monetary benefit compare to Bank.

  • Hallo Sir

    i am new in the field of Mutual fund , 10 years remain in my service retirement. As per friends suggestion I am investing in
    a) SBI blue chip-5000
    b) mirae india opportunity fund- 5000
    c) DSP blackrock small and mid cap-2500
    d) mirae emerging fund-2500
    e) motilala oswal most focused multicap 2500
    i can invest upto 25000 rs per month. pl advise

    regards
    bb jha

  • Thanks Sreekanth for the verygood artical/information, please suggest me
    my Age 35, owned home, No Loan.
    below 19K SIP investing (since 2010 and some started in 2014)
    6k (sector fund) – 2k reliance pharma + 2k Reliance Banking + 2k IcICI Technology
    5k (ELSS) – 2k Axis Long term + 2k Reliance tax saver + 1k DSPBR Tax saver
    2k (balance) – 2k icici Balanced fund
    2k (gold) – 2k Reliance Gold Saving Fund
    2k (Diverified) – 1k icici discovery fund + 1k Reliance Equity Opportunity
    1k (Large cap) – 1k ICICI Focused Bluechip
    1k (Divident) – 1k ICICI Dividend YieldnEq. Fund

    FD – 5Lac(renew every time)
    EPF – 80K/year(my+employer contribution)
    PPF – 60k/year
    RD – 5K/month

    Goal – max possible wealth creation(child education, retirement)
    tenure – minimum 15year to max 25 year

    Please suggest is it good portfolio or suggest any modification
    + i want to invest 6k/month – which sip i add it or take new sip ?

  • Dear Sir,

    I have been investing 6k per in Mutual fund since last 1.5 years, My portfolio and goal is as below.

    Axis Long term equity fund —— investing 1,000/- per month
    Birla Sunlife Manufacturing Equity Fund—— – investing 1,000/- per month
    DSP Black Rock Micor Cap Fund—– investing 2500/- per month
    ICICI Value Discovery Fund—-investing 1,500/- per month

    My Current Age is 30 years and i am having on LIC policy with SA of 2 Lakh (Jeevan Anand) & looking for Term Insurance.

    Axis Long term equity fund —— 20 years for retirement
    Birla Sunlife Manufacturing Equity Fund—— – 20 years for retirement
    DSP Black Rock Micor Cap Fund—– 10 years to get benefit for child education current age is 6 years old.
    ICICI Value Discovery Fund—-5 years for planning to purchase Motor Car upto the value of 4 Lakh.

    I have been working in an insurance industry and earning 25k per month & getting Health insurance from my employer.

    Should i continue with my above goal or need to do some changes.

    Pl advice and suggest.

    • Dear Karan,
      You may consider investing in an equity oriented balanced fund instead of multi-cap fund for your 5 year goal.
      Kindly do understand that sector/thematic oriented funds have high risks, you may consider replacing Manufacturing fund with a good Mid-cap fund instead.
      Once you buy a term plan, you may discontinue the existing life insurance policy.
      Kindly read :
      Best Term insurance plans
      Best Equity funds
      Traditional life insurance plan – a terrible investment option?
      How to select right mutual fund scheme?

      • Dear Sir,

        Thanks for providing such an important information regarding wealth creation.
        Should i discontinue with my existing two MF’S and replace with another.

        1) Birla Sunlife Manufacturing Equity Fund replace with L&T Business cycle fund
        2) DSP Black Rock Micro Cap Fund replace with Franklin India Smaller Cap Fund.

        Rest two funds- Axis Long Term Equity Fund & ICICI Value Discovery fund looks fine.

        Pl advice and suggest.

        • Dear Karan,
          If you have existing SIPs in DSP Micro cap fund, you may continue with it.
          Instead of birla fund you may pick any good mid cap fund for long term. Ex : HDFC mid-cap opp or Franklin Prima fund etc.,

          • Dear Sir,

            I am already having Multi cap fund- Icici Value discover in my portfolio, if i’ll choose Franklin Prima fund , there may be chance of Overlapping.

            Should i invest in Large Cap fund like Birla Frontline equity or Icici pru focus Bluchip fund etc.

            Pl advice.

              • Sir,

                Finally i have decided my MF portfolio which is below.

                1.)Axis Long term equity fund —— investing 1,000/- per month
                2.)Birla Sunlife Balanced ’95 Fund—— – investing 1,000/- per month & recalling existing BL Sunlife manufacturing equity fund
                3.)DSP Black Rock Micor Cap Fund—– investing 2500/- per month
                4.)ICICI Value Discovery Fund—-investing 1,500/- per month

                I am looking for another SIP under Large Cap category for investing 1,000/- per month.

                Pl suggest….

                e

  • Hi Sreekanth,

    I am an ardent follower of your blog and have been investing in MFs for close to 2 years now- almost fully basis this blog 🙂
    So, thank you!

    I seek your guidance on how often and how to check whether my MF portfolio needs any reshuffling?
    Also, in case I do realize there is need to shuffle, how do I go about it- as in how can I move from one fund to another without losing on the benefit of staying invested for long periods?

    Thanks!
    Gaurav

    • Dear Gaurav,
      Thank you for being a loyal reader!
      Ideally, you may review your portfolio’s performance once in 6 months, but reshuffling only if it is required may be say in 2 years or more than that.
      Personally, once I invest in a consistent performer (MF Scheme), I stick to my conviction and give it a sufficient time (for example I am with UIT midcap for the last few years, though it has been not performing well for the last 1 year) before making a switch.
      If switching is required, you may to have redeem the units and re-invest in the newly selected scheme, do watch out for tax and/or exit load implications (if any).

  • Hi Sreekanth,

    Very nice article, I wanted to invest in Balanced fund since long now I can start investing in this category.

    However, below is my current portfolio as SIP.

    1. Axis Long term Equity (ELSS – 5 years Loc-in) – 2000 RS.
    2. Mirae Asset Emerging bluechip (Mid-Cap) – 2000 RS.

    I am planning to invest in two more fund category mentioned below, kindly suggest if adding below category funds will be good for my portfolio interms of fund allocation and diversification and how much amount of SIP to be considered for below ?

    1. Large cap / Multi cap (Long Term horizon 8-10 years)
    a. SBI Bluechip Fund (Large)
    b. BSL Frontline equity fund (Large)
    c. ICICI Pru focued bluechip Fund (Large)
    d. Kotak select focus (Multi)
    e. Franklin High growth Fund (Multi)
    f. DSPBR Opportunities fund (Multi)

    2. Balanced Fund (Medium Term 3-5 years)
    a. HDFC Balanced
    b. BSL Balanced ’95
    c. L&T India Prudece

    Thanks,
    Mittal.

  • Hi Srikanth!! I have below funds as part of my portfolio.

    1. Axis Focussed 25 – growth (Multi cap)
    2. ICICI prudential balanced – growth (balanced)
    3. Franklin India Smaller Cos Fund(G) (Small cap)
    4. Reliance Small Cap Fund(G) (small cap)

    I want to invest Rs. 2000 more in SIP. Please let me know if I should choose L&T India Value Fund-Growth ( Mid cap) or any balanced fund from the list in your article.

    My investment horizon is long 10-15 years and my current SIP is Rs. 10000 / month. Thanks!!

      • Thanks Sreekanth for your valuable insights. Based on the blogs which you mentioned, I will be investing in below funds for this year:-

        1. ICICI Prudential Value Discovery Fund-Growth (multi cap)
        2. ICICI prudential balanced – growth (balanced)
        3. Franklin India Smaller Cos Fund(G) (Small cap)
        4. Reliance Small Cap Fund(G) (small cap)
        5. L& T value fund

        Also for my short/medium term horizon, I will be investing in Birla Sun Life Monthly Income Plan II Wealth 25 Plan-Growth.

        Please suggest if this looks ok to you.

        Thanks,
        Nikhil

  • Hi! i am looking for assistance in building up my investment portfolio. As of now, I am investing 5k in DSP tax saver. I have about 5-7k per month to invest for tax saving. Apart from tax saving i am considering investing in diversified equity or balanced. DSP tax save-a large cap ELSS, I am thinking of investing in mid or multi-cap elss. It would be favorable if you list some.I am interested in tax saving and investment, more of investment. I have thought of carrying investment for 5-6-7yrs time frame. Thanks.

  • Hi Sir – I am currently doing following SIP, i need your inputs if this is good for long term investment 7-10years

    BSL Manufacturing fund – 2000SIP
    SBI Magnum mid cap fund – 2000SIP
    HDFC Balance fund – 2000SIP
    Canara Robeco Emerging – 2000SIP
    ICIC PRU Focused Blue chip – 1000SIP
    L&T India value fund – 1000SIP

    your suggestion would be helpful….

    Apart a general asking is can i expect always good return in long term from any of the fund or I need to review in yearly basis, but what are the parameters like peer comparion or benchmarks??

    thanks/Mona

    • Dear Mona,
      Given a choice, I will switch from BSL Manufacturing fund to HDFC balanced fund and ICICI Focused bluechip.
      You may have review your portfolio performance periodically.
      Kindly note that it is next to impossible to be with the best or STAR performers for longer period. What matters is consistency. Its ok to be in top 10 if not in top 3 best funds.
      Do track your overall portfolio returns, in case if any fund is not doing well, compare its returns with its fund category average returns, benchmark returns and peers returns. Do not churn your portfolio based on short term bad performance , give the funds some time and then you may decide to replace it or not.
      Kindly read :
      How to pick right mutual funds scheme?
      MF portfolio overlap analysis tools
      How to create a solid investment plan?
      My MF picks

      • Dear Sir,

        thanks for your inputs………. I also have RD (5000 per month – done @ 9.25%) – 4yrs gone for 10 years horizon, on 10th year I will get approx 9.30lacs .

        I want to shift the money towards Equity & need your advice if

        – I stop this RD & put lumpsum amount which is accumlated till now – approx 3lacs (which fund pls??)
        – start SIP of 5k

        For a horizon of 10years??

        do you think it’s good idea OR should i stick back with RD only since ROI is good as debt product….. I already having Debt amount in PPF & already doing SIP as per my previous question from last 2years & time horizon is 10years

        thanks in advance!

        tks/Mona

  • The mutual fund schemes mentioned here really useful for the person who are looking for financial management. Thanks for sharing this blog. I think HDFC balanced fund could be beneficial and trustworthy.

  • Hai, I am 28 Years Old, i am recently starting SIP following Funds:

    1) Axix LT Equty Fund Growth – 1500 (Present Hold Value 9ooo)
    2) HDFC Mid-Cap Opportunities Fund Growth – 1000 (Present Hold Value 8000)
    3) ICICI Prudential Value Discovery Fund Growth – 1000 (Present Hold Value 10000)
    4) Birla Sun Life MIP II – Wealth 25 Plan – Growth – (Present Hold Value 2000) Stopped
    5) Franklin India Smaller Companies Fund – Growth – 500 (Present Hold Value 1500)
    6) SBI Blue Chip Fund – Growth – – 500 (Present Hold Value 1500)
    7) Tata Retirement Savings Fund – Moderate Plan – Regular Plan – Growth- – 500 (Present Hold Value 500)
    8) Reliance Small Cap Fund – Growth – 2000 (Daily Rs.100) (Present Hold Value 800)
    9) BNP Paribas Balanced Fund – Regular Plan – Growth (10000 Lupsum Hold in Stating Price NAV Rs 10.00)

    My investments horizon is long of apx 20 – 25 years. this Fund is Ok are any changes in Fund.
    Presently My Monthly SIP 7,000/-

    recently i am seeing Axis Nifty ETF – after open the fund i am seeting this returns aprox 850% above is it true.
    and
    presently Axis MF offer Axis Dynamic Equity Fund – can i invest this fund (Rs.10,000)

  • Hi, I have invested in following funds:-
    Franklin India Prima Plus Growth Direct – 2.50L
    HDFC Mid Cap Opp Fund – 1.50L
    Franklin Build India Fund-1.50L
    ICICI Pru Multicap Fund- 2.50L

    Additionally for debt, I invest 1.5L every year in PPF. I still have around 10L to invest in lumpsum. Should I continue in the above funds or go for new funds.

  • Hi Srikanth,
    Thanks for your valuable suggestions. I want to invest 1,50,000 lump-sum amount in mutual funds for my child future. Present my child is 5 years old and I want to continue fund for 10 years.
    1. Please suggest best mutual funds for 10 years period.
    2. shall I invest in two or three funds or single fund is sufficient?

    Thanks in advance,
    Mahesh

  • I have started i-sip for wealth creation.
    1) Mirae Asset India opportunities – 10k
    2) SBI Blue Chip – 10k

    I have another requirement to invest 5 to 7 lakhs lumsum for 1 year. Which fund gives atleast decent return? I expect atleast 8%, after tax. Can you suggest.

    Ram,

    • Hi Shreekanth,

      Sorry I have wrongly mentioned i-sip funds. Please see below right ones

      1) SBI Blue Chip Fund – Direct Plan – Growth – 10k
      2) Mirae Asset Emerging Bluechip Fund-Direct Plan – Growth-Growth – 10tk

      Please suggest for i-sip and lumpsum requirement

      Ram,

      • Dear Ram ..Both the funds are good. For lump sum investment, you may consider an Arbitrage fund and can hold the investment for just over 12 months, as the capital gains (if any) on Arbitrage fund is tax-exempt after 12 months.
        Kindly read : What are Arbitrage Funds?

  • Hi Shreekanth,
    I have started SIPs in
    1. Birla Sunlife 95 balanced fund (Dec 2016)
    2. ICICI Prudential balanced fund (From Dec 2016)

    Now from this month I am planning to invest Rs 10000 SIP in Reliance Pharma

    Also I am planning to invest in lumpsum
    1. Rs 1 lac in Reliance Pharma
    2. Rs 1 lac in birla advantage balanced fund

    Please suggest

  • Hi Sree,

    I have a query related to investment. As of now, I am new to mutual fund and yet to start investing. Planning to invest with SIP of 10 -12 K monthly. I am salaried , aged 32. Hence I can increase investments in next years. I have invested in PPF for last 4 years with 50-60K per year and plan to increase more. Have home loans till 2024

    Financial goal:
    1. To accumulate 5-6L in next 4 years. (MID TERM)
    2. Long term (15-20 years) to accumulate good amount

    Please suggest:
    1. Should i start with Equity oriented, Debt or balanced MF or mixture of all for both the goals
    2. In case of equity, which type would you prefer: large, mid, small, diversified.

  • hi srikanth ,

    2 queries

    1) i am having SIP of 4000 per month in tata balanced fund from last 2 years .. since std deviation is high , do you suggest to stop the SIP and move to another fund ..I also have 5000 per month SIP in hdfc balanced , do you suggest to put the tata balanced sip also to hdfc balanced ?

    2) regarding small cap fund , whats ur opiunion on reliance small cap,..i have running sip in dsp microcap and franklin smaller co.s , is investing in reliance midcap for 10 years horizon is a good option ..i think std deviation of this fund also a bit high , but returns seems to be good .

    thanks.

  • Sir,
    I am an epf account holder. My last contribution is 10/2016. Upto march 2017 interest added. Still how much period shall I continue my pf account with epf office. When shall I draw the money. Please inform.

    • Dear PRABHAKAR .. Normally, an EPF accounts becomes in-operative after 3 years, during these three years, the interest is payable and gets accrued.
      However, during last Financial year, the central Govt has announced that interest is payable even after 3 rd year.
      But, EPFO is yet receive a notification on this, I guess..

  • Dear sir, I am your regular follower, last year I start investeing sip in hdfc balanced fund .
    Sir the market is on higher side I want to add one more fund (hdfc midcap) in my portfolio.
    Please suggest me it is the right time or I wait for sometime.

  • Sir,

    These things are ok, yet to be listen. But I do not see any advise or tutorials regarding GST clearly. Because, most of the writeups are in complicated terms to understand by the ordinary people. can we have>>>>>>>>>>>> THANKS.

  • Hi Sreekanth,

    Thanks for the suggestions on the funds. Last year I have invested in HDFC Balanced fund after reading your article and I found it is good choice.

  • Hello Sreekanth,
    I have recently come across your blog and I find it pretty useful for personal finance planning. Thanks for creating this blog.
    I have a quick question not sure if this is the right platform to ask. Actually I am new to Mutual Funds but I would like to invest in some. I want to invest about 5 Lacs amount in some reliable investment with good returns. Is there any MF which can give me monthly income if I invest some lumsum amount ? Please let me know.
    Thanks in advance. Waiting to hear from you.

      • Hi Sreekanth,
        Thanks for your quick reply. I shall go through the suggested article and get back to you. Bye for now..

      • Hi Sreekanth,
        Few quick questions –
        1)where can I approach for MFs?
        2)If in banks do we have to submit form 15 for MFs ?
        3)If I invest a lumsum amount say today when can I start getting monthly payouts ?

        • Hi Sreekanth,
          Thanks for your reply. Well my investment objective would be to see something similar to MIS in post office where I put some fixed amount and get monthly payouts for a stipulated period. I presume something similar can be done in MFs but not sure about the payout time frame? So, if I invest say 5 lakhs in MF as lumsum amount when can I get monthly payout and for how long ?
          Waiting to hear from you.
          Thanks

  • Nice article and I hav recently invested in HDFC balanced fund. Balanced funds are best especially when market crashes and the amount lost is less compared to other funds. Returns are pretty good especially in the longer run!

    • Dear Srikanth,

      I am having home loan for 25 lakhs for 10 years period. 3 years emi payment completed. Now I am getting 10 L as lump sum from a sale proceed. Shall I pay this amount for my Home loan or shall I invest in equity mf. As home loan interest is less compare to MF returns (Say if I get 12% PA in equity which is more than my Home Loan Interest 8.6%)
      Could you please advice.

        • I am having 5 financial goals. Two Children aged 12 years & 6 years old for their education & marriage. And my retirement after 15 years. I think all are long term goals (more than 10 years) only except first child Education expenditure after 5 years.
          At present I am having total 30 L investments in MF. Some MF I invested are suggested by you in 2015.
          I am having family floater health insurance & term policy.
          My only liability is Housing Loan. Also this will not serve my tax benefits.

          Thanks in advance for your prompt reply & guidance.

          • Dear Harinath,
            Based on your profile, financial goals and current investments, suggest you not to pre-pay your home loan with a lump sum amount.
            Instead, you may invest this corpus for your long term goals (especially for Kid’s education & your retirement).
            Also, the home loan rates are reasonable, may remain so for atleast fr next couple of years…

            • I would suggest to prepay a portion to assuage our anxieties as this would definitely be nagging the conscience now and then. A peace of mind is an intangible benefit. Also the interest burden would come down.

  • This is really a very good article, Blogs are not just for socializing with others but it can also give us useful information like this. I really love your post, thanks for sharing this and looking forward to seeingfrom you more .

  • I am a follower of your blog from the past 6 months.your every article is very informative and trustworthy.I inspired by reading your posts.I need your advice regarding an investment strategy for my father(age 60) who is retired school teacher wants to park Rs 10 lakh at ICICI pru balanced Growth fund and starts a SWP of 10k every month from the 2nd year to fulfill the monthly expenses.Is it advisable to go ahead with this plan?

  • Hi Sreekanth, another nice article from your side.

    I have 2 questions here:
    1. As market is touching new highs every other day, do you think that it is wise to invest in equity oriented balanced funds. Balance funds invest in small/mid cap stocks as well. Don’t you think that large cap or debt oriented balance funds are better choice in today’s market scenario. My investment h0rizon is 5-10 years.

    2. I have ICICI balanced fund in my portfolio. But its NAV is around 120+. Don’t you think it is wise to invest in some other balanced fund having low NAV. Suppose if i invest 1000 in a month and NAV is 100, i would be able to purchase only 10 units but if NAV is 50, i will be able to purchase 20 units. I am sorry if my question is very silly.

    Thanks

    • NAV value and number of units do not matter when you are comparing 2 funds. If both the funds go up by 10%, you will have exact same notional profit in both – provided you have invested same amount in both.

        • Dear Saurabh,
          1 – As you have long term investment horizon, advisable to invest as much as possible in Equity oriented funds. Your time-frame and investment objective(s) are more important that current market conditions.
          2 – It is a misconception. Dont go by quantum of NAV. As opined by cvan..its the % of appreciation which matters.

    • 1) both strategy is fine as long as it fullfil your asset allocation. Have said that for 5-10 year, if you can take little risk balance fund/large cap may fetch better return than debit fund post tax.

  • I want to invest 5 lacs in hdfc balanced via STP. So i decided to invest 500k in hdfc liquid fund and choose stp of 10k every month. So the cycle will continue for 4.2years for 10k as 50 STP installments. But as i read on your blog liquid funds short term fund so is my way is correct??

    • Short term fund means you need the money back pretty soon (for your expenses, investment etc.). So, obviously you want to put it in something that is not so volatile, liquid, has less risk of loss, preserves capital and does not lose out to inflation too much.

      In my perspective, what you have done is fine.

      Because think of the alternatives. If you had put that into a longer term income bond fund that goes down by 5% every time there is a 1% increase in the interest rate, now suddenly you are looking at a fund of 450k to STP from rather than 500k. It will probably come back up to 500k but after a significant amount of time.

      On the other hand you can just keep the money in savings account and keep it safe with 4% interest only. However, now you are losing out on probably 1-2% additional income (and to inflation) that you could have got from liquid. In your case that is almost 5-10k. And liquid fund may just drop 0.2-0.3% or so (for example) for every 1% increase in interest rate. And it will very quickly recover too.

      • I have invested some amount sometime back but also planning to start an SIP on it.

          • Thanks, will keep that in mind. I wanted to diversify a bit as the other premier balanced funds mostly invest in large caps. CR seems to have picked quite a few good small caps.

            • Dear cvan..The fund has invested around 20% of its corpus in Debt securities, as per Valueresearch data, the debt portion falls under ‘Low’ quality and ‘high’ interest rate sensitivity block, you may have a look.

  • Sir
    I want portfolio management like am investing 8000 per month in SIP
    SBI CONTRA -2000
    SBI MAGNUM GF-1000
    SBI PSU -1500
    L&T MIDCAP -3000
    RELIANCE mf -500

    I wanted to know whether this is right investment
    My age is 34 and married with a kid of 3 years

  • Thanks Srikanth.This article is refreshing and timely.As market is forming new highs daily,most of the stocks and mutual funds have become expensive.Best time to invest in balance funds.

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