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Top Balanced Mutual Funds – Benefits & analysis of past Returns

Last updated: May 4, 2018 | by

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. All doctors suggest us to eat a healthy balanced diet.

Investing in Balanced Mutual Funds is not much different. Balanced funds are also known as Hybrid Mutual Funds. In this post let us understand more about types of balanced funds and investment returns from these funds (especially equity oriented 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.
  • 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 Fund

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 a Balanced Fund – Equity oriented. This means major portion of the fund’s assets are invested in equity.

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 funds).

Benefits of investing in Balanced Mutual Funds:

  • 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
  • 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.
  • Balanced funds have debt component in their asset allocation. Due to this they may suffer lesser losses during market downturns when compared to Equity funds.
  • These funds can be a better bet for first-time equity investors. These are also suitable for the investors who want to protect the downside during market downturns and want to benefit during market upswings. Remember that balanced funds may not out-perform the Equity funds during market upswings (Bull run).
  • Balanced funds can be a useful investment option to meet critical Financial Goals like Retirement Planning, Kid’s Higher Education etc.,

Top performing Equity Oriented Balanced Funds Top Balanced mutual funds returnsAbove table provides the past performance of balanced funds (equity oriented). HDFC’s Children Gift Fund (Inv plan) tops the chart with annualized returns of around 20% in 5 year category. Followed by HDFC Balanced fund with 18.5% returns. All these funds have generated returns of above 15% in the last 5 years.

Systematic Investment Plans (SIPs) Returns of Balanced Equity Oriented FundsTop SIP returns of hybrid balanced funds

The above table gives us idea about the SIP returns. I have assumed the monthly SIP amount as Rs 1,000.

Again, HDFC’s Children Gift Fund (Inv plan) tops the table with annualized returns of around 22% in the last 5 years. One more observation we can make on some of the very old funds. Example – HDFC’ s Prudence fund which was launched way back in 1993. This fund has generated SIP returns of around 23.18% in the last 15 years. The same fund tops the list in 10 year category, with returns of 18.95%.

The above past returns prove that investors will benefit if they stay invested for long periods of time.

What are the average returns of Balanced funds category?

The Below table gives us overall idea about the average returns generated by all balanced funds as a category.

Balanced funds category avg returnsCapital Gains Taxation of Balanced Mutual Funds

Capital gains taxes on balanced fundsIn 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).

The interpretation of data can sometimes be very tricky. For a different set of time periods, balanced funds might have given lesser returns. If our expectations are reasonable then I am sure balanced funds will deliver. I believe returns of 10% and above from a balanced fund (equity oriented) is a bonus.

Everything in life..has to have balance. It applies to investments too. I am sure you agree with me. Do you hold any balanced mutual funds? Share your views..Cheers!

(All the above plans are indirect plans, returns  > 1 year are  annualized and are Growth plans. Kindly keep in mind, past performance is no guarantee of future results- Image courtesy of Jeroen van Oostrom at FreeDigitalPhotos.net)

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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 7 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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  • Sir,
    I am Narasimha. The article is very good. I kindly request you to revise the content of this page (along with funds data) with the latest details. This article belongs to 2014 (very old). It will be helpful to the readers if the data presented is the latest data. Please dont mind about my comment.

    Thanks !!

  • RAMANA says: 20-01-2017-9PM
    Dear Sir,
    I suddenly found your blog and really appreciate your service. I am 55 years old.,I will retire ,Dec’16.My retirement fund will be Rs20 Lacs.My two DAUGHTERS are studying in USA& 2ND DAUGHTER BTECH FINALYEAR. I want to invest in Mutual fund 3YEARS. what are the funds to be invested. I am not take any risk. want a regular income of Rs 30,000 for my household expenditure.Please advise me.
    Reply

  • Sri Reddy,I will retire this month,Dec’16.My retirement fund will be Rs 80 Lacs.My two sons are studying in Plus2.I want a regular income of Rs 30,000 for my household expenditure.Please advise me.

  • well written article sir. I have a query. Suppose I have invested 50,000 /- Rs in a debt mutual fund on April 2015, then again I have invested 30,000 Rs in say Aug 2016. Now after 5 years in Nov 2021 I want to redeem 100 units amounting Rs 40,000. Then how the tax will be calculated and how indexation will apply here. My doubt is that there is some no of units which will be 5 yr old and some units will be 6 yr old. in this case how i will calculate tax. And please also tell us that in which ITR form this should be shown and where. thanks in advance.

  • Hi, i want to have 50lakh by 2029. How much i should invest and where to get that amount for my child education.

  • Dear Sreekanth,

    What is the best way to invest Rs 10 lacs with an investment time frame of 1 year, giving me a good “tax free” returns?

      • Dear Sreekanth,

        By 1 year i meant that it can stretch upto 1.5 years but not more than that. Considering STP of liquid fund to equity fund for 10 lacs for 1 year period, will it give me a tax free return or liquid fund will be taxed?

      • Transfer of fund from liquid fund to equity fund by STP, will that transfer be considered as exit load for liquid fund? Also, will that transfer be taxed considering it to be withdrawal from liquid fund?

        • Dear Dudeja,
          1 – STPs from liquid fund to Equity fund are considered as normal redemptions, so any gains on Liquid fund units will be taxed accordingly.
          Read: MF taxation rules.
          2 – Any applicable exit loads on Liquid funds will be levied.
          3 – As suggested in previous comment, investment in an equity fund with an horizon of around 1 or 1.5 years is not advisable.

          • Dear Sreekanth,

            This means that every transfer of money from liquid fund to equity fund will push me into tax and further the gains from liquid fund will be taxed on withdrawal. Also, trasnfer of money will be considered as exit load.
            Won’t I will have to inculcate a huge amount of taxes/fees? This will make my net return even lower than FDs.

            Also, what should be then a best investment horizon for STP?

  • Hi Sri,

    I had one year old child and want to invest 1 lakh rupees in his name.

    Is HDFC’s Children Gift Fund opt for long term ( 10-15 years)?

  • New to investment
    Planning to start SIP with a amount of 5000 pm from Aug-2016 for long term
    Can you please guide and advice me in opting the best available plans.

  • Hi Sree

    I am living outside India, aged 38 and new to MFs. Was thinking about investing in MFs in India and gradually build reasonable investment portfolio in MFs through SIP. Do you think it is it is right approach? How can I start investing, which funds should I consider, how much amount should I consider to start with (my idea is Rs 10,000 pm and learn for a year or so) and after 3 years where should I reach as regards to my investment pm.

  • Hi Sree,

    I am trying to invest in HDFC MF online. While doing the transaction for HDFC Balanced Fund or Small & Midcap Funds,it is showing Min SIP Amount of 5000. I want to start the SIP of 2000. Is it not possible to start SIP of 2k online ? whereas if I go offline its possible…

    Thanks in Advance…

  • Hi Sreekanth,

    I make it a point to come back to your blog whenever I can. Today I read about Balanced funds and MIP funds.

    I have a saving of 10 lakhs which I need to invest for 3-5 years as I do not need the money now.

    Please suggest which ones can I go for. Funds that can give atleast 20% annualised returns is something I would ideally want to go for. Please let me know your opinion.

    Kindest regards.

    • Dear Ksam,
      20% can be an unrealistic expectation that too for a time-horizon of less than 5 years.
      You can consider investing in combination of Short term debt fund + balanced fund (higher allocation for say next 3 years or so) + MIP fund.

      • Congratulations on completing 2 years with this amazing blog.

        I Already have kept some money in Short term debt funds.

        What exactly do you advise should be the % distribution of the 10 lakhs.
        Eg.
        3 lakhs lumpsump In HDFC balanced fund
        3 lakhs lumpsump in Tata balanced fund

        4 lakhs in birla Sunlife mip plan.

        Please advise if this looks fine. Please suggest the best way of investing this hard earned money 🙂

        Kindest regards.

  • Dear shrikanth,
    Accidentally hit your blog page and got addicted. Thanks for spreading financial awareness among masses.
    My family is blessed with daughters. My two brothers and a sister all blessed with 2 daughters. I want to invest 50k on each daughter to gift them in their marriages. The eldest one is 13 year and remaining 10, 7, 6, 6,5 .I would like to Invest as one time until their marriage. Kindly advice funds name, tax implications if any, I will redeem myself on the respective occasion.
    After reading your blog I buy term plan ICICI and may take family floater from star health next week. I will follow your financial planning advice(articles) with basics first, then, I will seek advice for investment after few months.
    Thanks

      • Thanks Sreekanth,
        I went through both the articles. This is gift investment, a reasonable and safe instrument will do. I read your best Debt mutual funds in India article. Therefore my understanding as follows,
        For 13 year old daughter I will opt for short term debt and remaining all, shall I make a balanced fund like HDFC/TATA.
        Should I do it lump sum or SIP as I have surplus cash. Is it advisable to do in one investment rather than dividing in each daughters name? If so, can I withdraw partial amount whenever occasion arises.

        Appreciate your guidance and advice.
        Thanks

        • Dear Satish,
          The target goal year even for the eldest kid can be around 7 years (minimum) right?
          If so, you may consider investing in a balanced fund for say next 2 to 4 years and afterwards you may switch /invest in safe investment avenues (FDs+RDs+Debt funds etc).
          You can make lump sum investments in balanced funds. But kindly understand the risks associated with equity oriented funds before investing your funds.

  • Dear Srikanth,Your article on Top Balanced Mutual Funds is about one and a half year old.Kindly update with latest return on these mutual funds.

    • Dear Dr Bansal..The returns might have changed but as of now my picks are same as far as Top balanced funds list goes.
      However, let me re-check the list again and will surely consider your suggestion. Thank you!

  • Hii kumar
    i am new investor in SIP ,Having a son 10yrs old,me 40yrs
    want to invest in 5000 Pm for 5years .please suggest me which fund i suppose to opt & get good return after 5years.

    Awaiting for your kind suggestions.

    thanks & regzrds
    Ganesh

  • Hi,
    I am Kumar age 46 wish to invest a lumpsum of Rs.25 lakh in Tata balanced fund for a term of 10 years. Is it a wise decision or I should opt STP route and a start a SIP in balanced funds ? Please suggest ?

    Kumar

  • Dear Srikant,
    I am Investing HDFCLife Pro Growth Plus Balanced fund 5000Rs per month since July’2014.
    Shall i continue in this plan or should quit?
    Please help because now my asset only 91K where i invest around 1Lkah.

    • Dear Ravikant,
      It is a ULIP (unit linked policy) where in they collect your premium and invest in the fund (balanced fund) chosen by you. They also deduct certain charges from the premium and then the remaining balance is invested in the funds. One needs to stay invested in ULIP through out the policy term to get any decent returns.
      If you discontinue it now, you can get the fund value after 5 policy years and nominal interest rate would be provided.
      Do you have any other life insurance polices?

  • Hey Sreekant,
    I follow your blogs before making any investment plan.I found it really helpful in making decisions.
    I recently bought axis LTE for my tax saving just by reading your blog on ELSS funds.

    I am 25 year old and I wish to make an investment portfolio.Now I can manage to invest rs.5000/month or 60,000/-year lumpsum which I will be increasing every year at 10 % .

    My goal is to get returns every fifth year interval.I choosed this return plan so that I can use money as and when required.(let us assume my personal goals – at the age of 30–house , 40- year child education, 60-retirement and so on)

    I want to get returns at the above intervals and I want to be rich when I am retiring.

    My goals are short term(3 to 5 years from now) -in which I can take high risk), midterm(10 to 15 years- moderate risk) and long term(more than 20 years-low risk) as well.

    Please help me to make my portfolio depending on my goals.

    Will be extremely helpful for your kinf advice on the same.

    • Dear Amin,
      For short-term goals, you have to invest in less risky investment options and you can take high risk for long-term goals.
      Do you have any family member(s) who are financially dependent on you? Do you have health insurance cover & Personal accident insurance cover?
      1 – Save money for ‘Emergency or for short term purposes’.
      Read : List of best investment options to build Emergency fund.
      2 – For long-term goal like ‘retirement’, invest in EPF/PPF & as much as possible and as frequently as possible in Equity oriented products.
      Read :
      Retirement goal calculator.
      My MF portfolio.
      Financial planning Pyramid..

      • Dear Srikant,
        Thanks for reply!!
        Yes..I my parents are dependent on me.
        We have health insurance policy….(New India for my parents)(for myself employer is providing Medical insurance)
        I too personally have accident insurance cover…bought from HDFC.

        I am planning to invest in
        1.ICICI prudential vlue discovery-
        2.DSP black rock
        3.TATA balanced fund
        4.Birla sunlife MIP

        Are ther above mentioned MF are good ??
        Do MF carry exit loads and whether tax is applicable on the mature amount.

  • Hi sree, I’m bharat age 24. I just started my career and I would like to invest rs.5000 every month for next 20yrs through sip. Your guidance would be very much appreciated. Thank you.

      • Dear Bharat,

        If u have just started investing, the first thing u should do is to ensure that your tax-saving options are exhausted before looking at other investment options. So in your case, you can look at ELSS (tax saving MF schemes) to begin with. At your age and phase of life, this is by far the best option. You have a limit of Rs. 1.5 lakh/year which will give u tax benefit also.
        So technically u should first invest Rs. 12,500/pm in ELSS schemes and then look for other long-term investments.

  • Hi

    I am trying to analyse balanced fund, what is your take on Franklin India Balanced Fund-G ? I thought it was more consistent?

    Thanks
    JJ

    • Ignore the previous question, because –

      I was planning to invest in a diversified fund and a balanced fund (Investment horizon around 4-5 years, lump sum investment of 1 L in each). For tax benefits I have already invested in Axis LTE fund (1 L in 2015) & SBI magnum tax gain (50K in 2014).

      For a diversified fund, I am thinking of Franklin India Prima Plus fund. Let me know your thoughts here.

      So for my balanced fund, I should not think of Franklin Balanced since the overlap of that fund with Franklin India Prima Plus is like 60+%. Please suggest me a balanced fund.

      Also is SIP better compared to lumpsum ? Or may be a lumpsum then continue with SIP of 1000 for the balanced fund?

      Btw, I am using your suggestions and fundpicker site to analyse and decide. Your articles are very useful. Thank you 🙂

      Thanks in advance.

      • Dear JJ,
        Franklin Prima Plus is a good fund with consistent track record.
        Balanced fund my picks would be : TATA/HDFC Balanced fund.
        For longer period, sip Vs lump sum does not really matter. If you have surplus money (lump sum), just invest and stay invested 🙂

          • As a thumb rule, when investing in equity MF, it is always advisable to invest thru the SIP route irrespective of the period (I am assuming that if u have decided on equity MF, the investment period is bound to be long-term).
            if u have a lump-sum, then after deciding on the equity fund to invest, u can invest the lumpsum in a liquid fund of the same fund house and then start an STP from that liquid fund into your chosen equity funds. This way, u will get the best of both worlds – liquid fund will give u returns higher than your savings account and u will also balance the market volatility thru the SIP route.

  • Hi Sree,

    I am new to the world of Mutual fund investments. 10 years from now, I wish to start a portfolio in MFs.
    I am 28 years old. To begin with, I plan to invest 2,00,000 INR as of now, for a period of 3-5 years.
    From what I read in your articles, I understand that Balanced Mutual Funds are a safe bet as I am new.
    – Could you advise me which is the best plan for me. Should I carry on with just Balanced MFs or any other options?
    – In Balanced also, Equity oriented is better or Debt oriented is better?? can you name me few in both categories … please!
    – Should I invest the whole amount (2 Lkahs) into one MF? Or should I break it down into two – three categories. If so, kindly advise which are the best options for me?
    – How much period should I decide upon? I was thinking three years!
    – Should I pay it all in one go or should I pay in monthly schemes? (sorry for the of silly question)
    – Once I decide on the scheme of MF, what is the step 2, step 3 extra?

    I know you are a busy person. Your guidance will be much appreciated!

    Thanks in advance!

    ~
    VV
    –

  • Dear Mr Sreekanth,
    I want to invest about 25 Lakhs for 5 years. I am 44. Appreciate if you can suggest good funds.

  • Dear Sreekanth

    I am naresh,I am very much new to the investment and interested in investing in MF by SIP of Rs:2000pm,with the time horizon of 20yrs
    Can you please help me out which are the funds need to be am invested in
    Main aim behind investing is good returns in long term which can be useful as am just 20

    Thank you well in advance

  • Hi Sree – i am 34 and new to investments, i want to invest on long term basis for my childs future who is months old – my monthly investment range is INR 5000 – 10000, at this stage and shall increase YoY. Pl suggest some feasible options or combination of options please.

  • Hi Sree,

    I have started investing 1 lac pa for 15 yrs from 2014 in HDFC Balanced Fund.

    Is it a good option. Will i get enough corpus after 15 years.

  • I want to invest in tax saving mutual fund ? please suggest 2 3 best funds right now.

    Also PPF is better of Mutual Fund ?

  • Hi Sree,

    I want to invest 20-30K for 3-5yrs time period. Please suggest any plan which can help me in tax saving as well.
    Is FD of 25-30K for 5yrs is good option?

  • Thnx…i have no knowledge about marketing and fund invest.i read your article and saw some pics of mutual funds..will you please clarify me 53.27% return for 3yrs…is it 53.27% per year or 53.27% for complete 2yrs?

  • Hi Sreekanth,

    I am interested to start investing in Balanced Equity SIP’s. I would like to know weather i will be able to monitor in which shares they are putting my money if i start investing in them? Please let me know.

    Thanks in advance
    Sivakumar.k

  • Hi,

    I am 34 years.

    My salary is 18k.

    I want to start my first mutual fund investment via sip for my kid.

    Pls advice which fund to choose?monthy 1000 rupees.
    Time horizon is 15 years.

    Pls name few mutual fund to choose.

  • Thanks…shree
    i have 2lacs in closed my RD…i do investment for 3years lumsum invest which is best mutual fund for short term and best return….

  • shri…1) i have 1 lic money back policy 20 year term ….i want my retirement pension 1lacks per month after 30 years
    2) i accumulated for my future good wealth…

  • Thanks…shri..
    for reply…plz..tell me how to open nps account my rural area national bank avoid open my nps account plz…tell me can i open online nps account ..or other way to open nps account… plz reply

  • Hi shri… maine kuch research kar axis long term equity me 1000 sip suru ki h…maine aapko mail kiya ..but no reply… meri age 30 year hai mai meri retirement aur child education ke liye amount jama karna chahata hu
    maine lic ki policy li h -1000month
    apy-600month
    ppf-1000 month
    post Rd-1000month 5year
    axis elss-1000month
    aur1500 ki sip karna chaahta hu plz muje suggest me good fund for my children education after 15 year and my retirement after 30 years…suggest me good fund…plz

  • Hi SreeKanth,

    I am new in Mutual fund investment and 36 years old.I have a plan to invest 15000 per month for next 10 years.so could you please suggest the best option for me.

    Thanks in advance.

  • Hello Mr. Srikanth,

    Like to invest 30 lakhs saving to mutul fund. Can i do on lum sum basis if so please suggest.However please
    consider that am already nearing 60.
    Appreciate your best possible investment solutions

  • I am new in investment. My bank is Axis bank. They insist me to invest in their Hybrid fund 27 series? what is your opinion?

  • Hi…shrikanth. .first thanks to ur informative articles.m 28 years old….I have to invest 5000 rs per month for 3 years through SIP. .having medium to low risk fund. .I have shortlisted some plans. .kindly give me ur opinion on that plz..i. e., rel top 200,Birla sunlife equity n frackline india.eagerly waiting ur reply. ..

  • Hi SreeKanth,

    I am new in Mutual fund investment and 33 years old.I have a plan to invest 2500 per month for next 10 years.so could you please suggest the best option for me.

    Thanks in advance.

  • Hello sir i m new in investment i want to invest in MF SIP basis but when i try to invest there are a lot of confusion to select funds.where to invest open/close ended, either in debt/equity/balanced, either in growth/divedent either in large cap/mid cap/large cap.little bit confusion on return % while surfing money control for ex. 34% is it given benefit of 34% or assurance of 34% return of my invested money.and how to select time period like in money control for XYZ fund its shows 1 year 42% for 3 year 31% and 5 year 24% then what time period should i have select.kindly guide me to select and invest in MF.finally how to invest though money control or same/ direct website/broker..does they charge anythingmight be my questions will be very foolish and basic but truth is i don’t know anything about MF. I want to invest 100000 fro FD and 5 year plan. Sugesst me how can investment. I can also invest 2000/-₹ monthly.. Which is better option . waiting for your valuable response.

  • Hello sir i m new in investment i want to invest in MF SIP basis but when i try to invest there are a lot of confusion to select funds.where to invest open/close ended, either in debt/equity/balanced, either in growth/divedent either in large cap/mid cap/large cap.little bit confusion on return % while surfing money control for ex. 34% is it given benefit of 34% or assurance of 34% return of my invested money.and how to select time period like in money control for XYZ fund its shows 1 year 42% for 3 year 31% and 5 year 24% then what time period should i have select.kindly guide me to select and invest in MF.finally how to invest though money control or same/ direct website/broker..does they charge anythingmight be my questions will be very foolish and basic but truth is i don’t know anything about MF. I want to invest 100000 fro FD and 5 year plan. Sugesst me how can investment. I can also invest 2000/-₹ monthly.. Which is better option . waiting for your valuable response.

  • Sir, Thank you for your great article.I am a student.I want to invest in HDFC/ICICI balanced mutual fund.I cn spare 2000/3000 monthly.Can I invest for 3-5 years?? And can you tell me what are the returns I will b getting after 3 and 5 years??

  • sir iam madhu iam intrested to invest mutual funds. that is i don’t want to risk and usefull to tax saver fund. my goal is after 10 years i want 50,000,00/-. iam inveted monthly 1000/- it is possible what is good fund.and i have two kids.

  • Dear Sree,

    I am new to the MF market. Could you please suggest in which Mutual funds plan I have to invest to begin SIP. I am 29 years..i am interested in balanced funds as well as tax saver.
    Your suggestion highly appreciated

  • hello sir, i am 30 years old 1)my goal is 15 year peried to generate 25 lacks for child education?
    2)retirement perpose after 30 years get 1 carore rupee
    which fund better for my two purpose and how many invest thru sip plz suggest me…..

  • I heard that we get higher returns if we do mutual fund investment directly than through online facilitators like fundsindia. Is it possible to do direct investment online?

  • Equity oriented funds must have atleast 60% in equities but for tax- avoidance mininmum 65% is required. Please let me know which of the balanced equity oriented funds belong to the latter category.

  • Hi Sreekanth,

    i am 31 year old I want to invest in SIP for 15 years and want output of 75 lacks after 15 years.
    Please let me know the fund names in which I should invest and also the amount of monthly investment.

  • Dear sir,
    I am new to investment in MF.I need to know :how % of growth/returns is calculated?for eg.if Nav of a particular fund is 200 today,and I invest in it for 10 yrs.after 10 yrs, the nav is 400,then what is the % growth ?

  • Dear Sreekanth,

    I have gone through your articles and I am convinced with your analysis. What I would like to know is the following:-

    1. I am an NRI, and I have my funds for my rainy days and planned out a retirement as well. What I am trying to understand is with a monthly capacity of INR 15k, for a period of about 3 years, what are the best SIP available to invest.

    2. I can put 1k in 15 funds where I see the profit%. I understand the Alpha and Beta calculation benchmarks and all your terms used in analysis. Kindly advice on the SIP.
    3. Also, I would like to know any such SIP investment for a period of 25-30 yrs with monthly frequency where I can get about half million$ (about 3.3 cr). Please note the investment here is different and not to be considered from my mentioned amount.

    I would appreciate if you reply with a detailed email

    Regards,
    Ishaan

    • Dear Ishaan,
      1 – 3 years can be a very short investment period to invest in Equity oriented funds. Do you need these monies after 3 years?
      2 – Investments in 15 funds are not required. you can pick 3-4 funds based on your time-frame and financial goal(s). Too many funds may lead to Portfolio overlap.
      3 – Besides Returns, it also depends on your monthly quantum of investment. If your investment horizon is >25 years, you can surely consider investing in Mid-cap oriented funds.

  • Hello sir i m new in investment i want to invest in MF SIP basis but when i try to invest there are a lot of confusion to select funds.where to invest open/close ended, either in debt/equity/balanced, either in growth/divedent either in large cap/mid cap/large cap.
    little bit confusion on return % while surfing money control for ex. 34% is it given benefit of 34% or assurance of 34% return of my invested money.
    and how to select time period like in money control for XYZ fund its shows 1 year 42% for 3 year 31% and 5 year 24% then what time period should i have select.
    kindly guide me to select and invest in MF.
    finally how to invest though money control or same/ direct website/broker..does they charge anything
    might be my questions will be very foolish and basic but truth is i don’t know anything about MF.
    waiting for your valuable response.

    • Dear Atul,
      Kindly note that the past returns may or may not be achieved in future.
      The brokerage or transaction charges are dependent on the investment platform you choose. There are online distribution platforms like fundsindia.com, which are free of charges for mutual fund investments. You can also invest directly by visiting respective mutual fund company website.
      For this, you have to first get your PAN KYC done.

      Firstly, let me know about your financial goal(s)? How long can you invest? You have to select financial products based on your goals and time-frame.

      Your questions are relevant and genuine.

  • Dear Sir,
    I suddenly found your blog and really appreciate your service. I am 40 years old. I want to invest in Mutual fund through SIP to fulfill my objective of acquire a corpus of Rs. 30 lacs after 15 years. How much should i invest through SIP monthly and what are the funds to be invested. I am ready to take moderate risk. Please suggest.

  • HI

    Iam new to mutual funds and planning to invest in the following funds

    iam looking to invest in SIP 6000 rupees each in below mentioned funds . iam planning for long term(15 years) .

    Since iam planning for long term let me know should i go for Axis ELSS fund or not ?
    Also please let me know if below mentioned funds have proper diversification?(Equity and debt)

    i selected following funds after going through past performance , rate of returns and investment strategy

    P/B P/E SD Sharpe ratio Beta Alpha
    Franklin india high growth companies fund (multi cap) 3.2 23.7 15.34 1.62 0.99 15.36
    Franklin india smaller companies fund (mid & small cap) 3.4 22.3 16.2 1.82 0.97 20.13
    Mirae asset emerging blue chip fund (mid & small cap) 3.42 23.43 15.34 1.88 0.91 19.24
    Axis long term equity fund(ELSS tax saving) 8.55 35.3 13.43 1.76 0.88 15.1

    Checked portfolio overlap for above mentioned funds and its below 20 % for all the funds

    After verifying the analysis total average mid &small cap investment % is 57 and Gaint &Large cap investment % 43 for the funds selected

    i selected Small&midcap because iam ready to take risk and since iam looking for long term investment i think i will get better returns (as per the previous 10/5 year returns)compared to Large cap funds

    In case of Axis long term equity fund fori selected this fund on basis of the following synopsis i got about this fund in Value research

    “The outstanding performance is mainly due to the steady increase
    in small- and mid-cap stocks in its portfolio, which was initially tilted
    towards large-cap stocks. Currently, the fund holds around 43 per cent
    mid- and small-cap stocks in its portfolio. The large presence of small and
    mid-cap stocks and such aggressive positioning make it a risky bet
    and suitable only for investors with a higher risk-taking ability”

    Hope i made my point clear to you .
    Please give your suggestions and if any mistakes in my invest plan

    Since my total Large cap exposure is 43 % approx , Mid & Small cap exposure is 57% approx should i go for one pure balanced fund also(i have in mind TATA balanced fund PLan A)

    Last but not least i read in many blogs experts like you are suggesting New investors to go for Balanced funds rather than Diversified equity funds . wat the reason behind that .

    Even a new investor if he/she spends some time researching about various funds in valuable sites like Value research online , CRISIL under standing risks and returns involved in Mid &small cap funds compared to balanced funds cango for mid &small cap fund investment if duration is longer(more than 10 years). what do you say ?

    Regards
    Siva

      • Dear Siva,
        I was busy on personal front and was away from work.
        Appreciate your analysis and efforts to identify right funds as per your goals/investment objectives.
        If every ‘New investor’ does a research like you then certainly can prefer investing in diversified/mid-cap funds for long-term.
        Kindly go ahead with your investments.

        • Hi Sreekanth

          Should i go for one more balanced fund as i mentioned above or selected funds are good enough ??

          i got my CAN number and ready to start investing . this is the last check i would like to do

          regards

          Siva

          • Dear Siva,
            I personally prefer investing in Balanced funds. If they match your investment objective, you may consider investing in HDFC balanced or TATA balanced fund.

          • Dear Siva,
            I personally prefer investing in Balanced funds. If they match your investment objective, you may consider investing in HDFC balanced or TATA balanced fund.

            • Hi Sreekanth

              Thankyou for sharing your opinion .
              Personally i thought of giving some kind of equilibrium in low times by considering one balanced fund in the portfolio

              Thank you very much for your suggestion and i hope so many new investors like me will get overall picture about investing in mutual funds by going through this form

              regards
              Siva

              • Dear Siva,
                Yes, balanced funds give the much needed equilibrium to one’s MF portfolio. Do remember that when we are investing for long-term, there are certain periods when Debt markets outperform the Equity markets, so balanced funds do outperform many of the Regular Equity diversified funds.

  • hii, I’m new to SIP MUTUAL FUNDS AND ALL, i want to invest 5k per month in sip but dnt know in which sec or which sip should i take my age is 24yrs.plz suggest acc.

  • Hi Sree,

    I am new to MF. My age is 28 yrs.. I am married…I want to invest around 3000 and 3000 separately in 2 MF for a period of 3 yrs and 5-10 yrs …One for my sisters wedding and other for my children…Please let me know which fund will be the best.. i read your balanced fund page…but still confused….Any suggestion will be of great help..

    Thanks and regards,
    Subham Dutta

    • Dear Subham,
      3 year Goal – Check out Mutual funds MIP aggressive plans. Kindly read this article : Top MF MIPs.
      5-10 year Goal – Consider one balanced fund and one diversified equity. Ex- TATA Balanced fund & Franklin Primaplus

  • Hi Sir,

    I’m 27 years old. I’m new to the mutual fund investment area and I want to do for wealth creation in long term

    As of now, I could save 10k in my monthly salary. Out of which, I want to invest 6k in mutual fund in SIP way and rest(4K) in savings.

    I have chossen below funds to invest in SIP way.

    Large Cap:
    2K in ICIC Pru foccused Bluechip Fund(G)

    Mid Cap:
    2K in HDFC Mid cap opp fund(G)

    Balanced fund:
    2k in HDFC balanced fund(G)

    I have choosen the above plans. Can you please suggest if i selected are good fund? or any suggestion to get best returns or If you want to invest more money in the choosen funds ?

  • Dear Sree,

    First of all thanks for your good work.

    I am planning to SIP for the below around 10 years

    UTI-EQUITY FUND DIRECT GROWTH – 3000 p/m
    CANARA ROBECO EMERGING EQUITIES DIRECT GROWTH – 3000 p/m
    Franklin India High Growth Companies Fund – Direct-GROWTH-3000 p/m
    Tata balanced fund-3000 p/m

    Which balanced fund is good. Tata, ICICI, HDFC?

    What is your view on the above, thanks.

    take care
    g.rajesh

  • hello sir,
    I am 20 year old college student currently doing graduation in commerce and chartered accountancy simultaneously. I stay out of home and hence receive monthly ‘pocket money’ to meet my various expenses. I manage to save around 1000 rupees per month which remains idle in my savings account .I want to start investing my money in various funds with the aim to gain practical knowledge of investing without particularly looking at gains and other benefits. I wants to invest on monthly basis for a period of 2 years to get a lumpsum return in end. kindly suggest where should I invest?

    • Dear Harsh,
      I believe that investing in a balanced fund or in a Monthly Income Fund makes sense. Balanced funds have high risk profile when compared to MIPs.
      Kindly read my article on Top MF MIP funds and then take a decision. Revert to me if you need any assitance.

  • I want to invest for saving tax while accumulating a corpus for child’s future educational and some investment in property.I am willing to stay invested for long time with 60% amount and 40% for 5 to 3 years.

  • Hi Sreekanth,
    I am new to investing.
    I want to invest SIP monthly 2k .
    I am considering Rs1000 in HDFC Balanced fund or HDFC children gift fund for 5years. Please suggest any one.
    Also want to invest another RS1000 in icici prudential blue chip fund for 10 years.

    Please advice .

  • Hey srikanth , I am 27 years old, and have 2500 saved up. which mutual fund should i invest in for biggest returns in a 5 year plan? any suggestions would be appreciated. Thanks

  • Dear Sreekanth,
    As discussed with you earlier, I have started my SIP in MF thru Large, Mid-cap and Small funds.
    Now, I would like to invest in safer avenues.
    Instead of investing in Fixed Deposit, I was earlier planning to invest in Birla Sun Life MIP Wealth 25.
    But, felt to avoid the taxation of the same as LTCG, am considering the option of investing in Balanced Funds.
    (1) Are Balanced Funds a good option for my purpose?
    (2) Also, considering I am 23, which option would you suggest me – Equity Oriented, Debt Aggressive, Debt Conservative with a somewhat secured return as per past performances
    (3) Should a lumpsum investment of an amount, say Rs 5,000/10,000 be done in one shot or an SIP is recommended for the same?
    Please guide.

    • Dear Sanchit,
      If you are planning for long-term, invest in balanced funds. Considering your age, you can accumulate decent wealth by taking risks now and by investing as much as possible in equity MFs. Consider SIPs.

  • Hi Sreekanth,

    I am asking on behalf of my parents who are retiring now. They have a retirement corpus of around 15 lakhs and monthly income of around seven thousand from post office monthly income scheme. They are very risk averse. However, I want them to invest a part of their retirement corpus in some balanced mutual fund as this is still the early stage of retirement. Please suggest some suitable equity oriented as well as debt oriented balanced mutual funds.
    Is this the right approach? Please let me know if there are any other suitable options for investment. Both of them have some form of health insurance.

    • Dear Sowmya,
      They are just retiring now..so I endorse your views on investing a portion of their retirement corpus in mutual funds.
      You can surely consider balanced funds, besides this check the monthly income plans offered by mutual funds. MIPs are Hybrid-Debt oriented schemes.
      But let them understand the risks associated with balanced funds & MIPs. (Read my article on – Top MIP Mutual funds).
      Do they have health insurance cover?

  • Hi
    I want to invest in NPS.Please let me know the process of investing it through sbi.which one is the best fund manager for NPS?

  • I have just retired at age 60, I have 16 lac to invest for regular monthly/quarterly income. which balance fund or investment will be best for me. risk should not be high..

    • Dear Subimal,
      Suggest you not to invest the entire corpus in one asset category. Invest in FD / Post office Monthly Income Scheme / Post office Sr Citizen scheme. But, you may have to take little bit of risk to get decent portfolio returns, so that it beats the inflation rate.
      Also, consider investing some portion in Monthly Income Plans of Mutual Funds to beat inflation rate. Kindly read my article – “Top Monthly Income Plans by Mutual Funds“.

  • Dear Shreekant,
    I am 24 year old and fairly new to the investment world. I wanna invest up to 5000 in SIP. Preferably split into two or more funds.
    Can you suggest a way ahead?
    Which funds to invest on and with what kind of split to go ahead?
    I am looking for a 5 yr investment plan as of now.

  • Hi Sreekanth,

    Very informative site.

    We are planning to invest in Mutual Funds (both in lump sum and in SIP). We are looking out for tax benefit and also long term investment for around at least 10 years.

    Currently we have shortlisted SBI Magnum Tax Gain Scheme Direct Growth Plan, Reliance Tax Saver. Now thinking of HDFC Children Gift Fund as well.

    Need your advise on these –
    1. Are these goods plans to invest.
    2. Which plans should be selected for SIP and lumpsum.
    3. Are there any other good plans other than this. Please advise.

    Thanks in advance.

    Regards,
    Shruthi

    • Dear Shruthi,
      My picks would be (ELSS – Tax saver);
      Franklin Taxshield / ICICI Tax plan / Axis long-term equity. Kindly go through this article – “Top ELSS Funds”
      Do note that HDFC Children Gift Investment plan Fund, is not a tax saver. But, its a good one.

  • Hi,

    I want to invest around 10k for 2-3 years in Diversified MF. I am not interested in tax benifit. Hence i have choosen the below plans. Can you please suggest if i selected are good? or any suggestion to get best returns.

    ICICI Pru Exp&Other Services-RP (G) – 2500 Rs
    Franklin High Growth Cos (G) – 2500 Rs
    UTI MNC Fund (G) – 2500 Rs
    Birla Sun Life India GenNext Fund(G) – 2500 Rs
    BNP Paribas Equity Fund (G) – 2500 Rs

    Thanks,

  • Hello,
    I want to start a portfolio with 30 Thousands.
    And there after every month 3 thousand would like to invest.
    Please suggest the stocks name (from large cap, mid cap & small cap).

    Regards
    Aakash Jha
    09429109881

  • Hi Sreekanth,

    I have discussed my mutual fund plans with you some time back And initiated sips. My wife has an FD and RD maturing around July, total around 8 lac. I would like to explore Equity oriented Balanced MFs. (I am not forseeing any requirement for this amount for atleast 5-10 years; below my thoughts.

    Invest 5 lac in an equity oriented MF, and open an FD for 3lac.
    I’m considering HDFC Children gift plan, HDFC Balanced or ICICI balanced. I already have HDFC Balanced fund as part of my monthly SIP portfolio, so leaning towards 2.5 lac in HDFC Children gift and 2.5 lac in ICICI balanced, + 3lac in FD. is this a good idea? Considering balanced approach for wife as majority of my investments are in Equity Large Caps and Mid + Small MFs.

    Also let me know the procedure for opening MF for an NRI status individual. Both FD and RD are in NRE account. (Also note that She is a First time MF invester and do not have a PAN).

    Thanks!

    • Two clarifications;
      1) The invester is not in US/ Canada – heard some restrictions for US based NRI
      2) The invester is planning to return to india in 1-2 years.
      3) investment has to go out from NRE account and redumptions has to come back to NRE or Savings Account. (NRE account may not be active once the invester returns to India; What to do in this situation?)

      Thanks!

      • Dear Noble,
        Instead of investing the lump sum amount, suggest you to book Systematic Transfer Plans (STPs) in Debt / MIP oriented funds and you can switch every month certain amount to equity oriented schemes.
        For example – Book STP for say Rs 1 Lakh in ICICI Pru MIP plan and transfer Rs 25k for next 4 months to ICICI Pru Focused Bluechip fund / ICICI Balanced Fund.
        Go ahead with balanced fund. Why do you want to invest in FD? Any particular reason?
        PAN is mandatory and also you need to get KYC done.

      • Dear Noble,
        Not exactly restrictions but need to meet some compliance checks. Invest in MFs with NRI as residential status, once he/she is back, you can update the residential status with AMCs.

        • Dear Sreekanth,

          Thank you for throwing light in to MIPs and STPs; I really likd the idea.

          Switching from Debt / MIP oriented funds will consider as redumptions know?, if so, we may need to pay exit load? – For each STP untill 1year completed?

          FD: was planning to park some portion in FD just for a pure debt allocation, but considering MIP, I may opt that STP idea.

          Also one doubt, can we initiate STPs from one AMC to another?

          I’m planning to opt for ICICI pru MIP, and STPs to ICICI balanced and HDFC children gift fund., or may be a small llocations via STP to ICICI focused blue chip and value discovery – may be 10-20% of total amt.

          Thanks,
          Noble

  • Hello SreeKanth
    Very informative post. I have started with monthly SIP of Rs25000 for term of 3 years from Apr2015. Here is my split, pl review and let me know whether it is fine are do I need to do any changes?
    1.Birla Sun Life Pure Value Fund-Growth –> Rs5,000
    2.Franklin India High Growth Companies Fund GROWTH –> Rs5,000
    3.ICICI Pru Focused Bluechip Equity Fund Reg Plan Growth –> Rs5,000
    4.RELIANCE SMALL CAP FUND – GROWTH –> Rs5,000
    5.RELIGARE INVESCO MID N SMALL CAP Fund -Growth –> Rs5,000

    I also have a lumpsum of Rs 400000 that needs to be invested .Ok to have a lock-in period of 5-7 years. Pl suggest options

      • Hello Srikanth
        Current financial goal is having funds @the end of 4yrs & 6yrs to support my daughter ‘s education as she is going to 6th grade now

        • Dear Nagmouli,
          Goal Target year 4 years from now – Invest in a balanced fund for next 2.5 years and then switch the accumulated fund to a Debt fund or MIP fund. (Example – HDFC Balanced & Birla Sunlife MIP II Wealth 25 plan)
          6 years Target – Invest in a balanced fund for 4.5 years and move to MIP fund.
          Read my article – Top MIP funds.

  • Hi,

    I am 31 years old want to invest 10000 in SIP. My planning are as follows:

    1. ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND – REGULAR PLAN : 3000 for 5 years

    2. HDFC BALLANCED FUND : 3000 for 5 years

    3. HDFC MID CAP OPPORTUNITIES FUND : 3000 for 10 years

    Kindly suggest is it good planning or do I need to change .Thank you.

  • Hi,
    I am new to SIP.I want to start my investment with Rs 1000 per month.Time may be 3-5yrs
    Please let me know best SIP plans also should i opt for ELSS thru SIP or normal open ended SIP.

    • Dear Poonam,
      If your investment horizon is < 5 years, you may consider below funds; HDFC Balanced fund (suggest you to stay invested for atleast 5 years) Birla Sunlife MIP II wealth 25 plan.

  • Hi Srikanth,

    Thank you for such an informative blog. I am new to Mutual Funds and plan to invest Rs. 8000 as sip for the mutual funds. I m 31 and plan to invest in the horizon of 7-10 yrs. I have shortlisted few of the funds :

    HDFC Balance Fund (G): Rs.3000
    Canara Robeco emerging equities (G) : Rs. 3000
    Axis Long term Equity Fund (G) : Rs. 2000

    Please suggest

    Thanks

  • Hi sreekanth,
    I have started 3 SIPs each of 1000 Rs in axis long term equity fund , ICICI prudential focused fund and ICICI prudential balanced fund… I heard that ICICI and AXIS are in the race of acquiring UTI mf … Is that correct?
    I want ur valuable views about these three and want u to throw some light on their performances…
    Waiting for ur reply…

  • I am new to this mutual funds.My monthly income is 34,000 and savings around 20,000. Pls suggest me good mutual funds to invest for 1-2 years. I shall invest around 15,000.

  • I am new to MF. I want to know the whole procedure for investing money in ELSS. MF utility is a good option?

  • hi,
    thanks a lot for valuable reply…………. i go for it as per your reply. as per your post top balance fund or see the almost answers of quries by you.. i selected HDFC BALANCE Direct plan for my investment but my friend say to invest in ICICI BALANCE ADVANTAGE fund……..they say that its less volatile……. so pls suggest which is better HDFC BALANCE or ICICI BALANCE ADVANTAGE…………..

    • Dear Prem,
      Both are good ones. HDFC balanced fund was launched in 2000 and icici fund in 2006. I am always comfortable choosing an old fund, as we get to a chance to analyze its performances over longer periods.

  • Dear Sir

    I have two question in my mind regarding MF

    1. Instead of SIP say for example 5000rs per month, if i invest lumpsum 60,000rs in any MF will it bring less return?

    2. For selecting out of plenty MFs in market, what is the role of amount of Asset any MF is controlling? What i mean lets say two MF one is controlling 1000cr and another is 3000cr, now will the MF controlling higher amount of Asset will be the correct MF to choose?

    Pls.throw light on these queries. Thanks in advance

    Shunny Nigam
    Delhi

    • Dear Shunny,
      1 – Returns from SIPs and lumpsum can vary depending on the market conditions. If you invest lump sum and market gets into bull run say for the next few years, returns can be abnormal.
      2 – If you are a long term investor do not worry too much about the AUM size (Assets Under Management).

  • Hello

    In MF return why the return on 1yr or 2yr is higher than 5yr? Does it mean we can redeem and exit from MF after 2yrs to get higher return in % .

  • Dear sreekant,,
    My age was 29. and i have sueplus 100000/- so i want to invest it for 10 yrs. In this time when NAV was very higher i invest lumsum in a balance fund or wait some time….. pls suggest me…… i have to sip with uti equity-1000, and hdfc midcap-1000 from march 21015…
    pls answer my quiry in my mail id…….

    • Dear Prem,
      If your investment horizon is 10 years, any time is good time to invest in mutual funds. Kindly do not try to TIME the market.
      Go ahead and invest in a good balanced fund.

  • Hi Sreekanth,

    Thank you for providing complete financial information and helping us in our investments.

    Listed below are my current investment with a time horizon of 20-25 years. Wanted to know whether continue with below funds or need modification.

    1 ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND – REGULAR PLAN – GROWTH Rs. 5000
    2 RELIANCE EQUITY OPPORTUNITIES FUND – GROWTH PLAN – GROWTH OPTION Rs. 5000
    3 UTI OPPORTUNITIES FUND GROWTH Rs. 5000
    4 HDFC MID CAP OPPORTUNITIES FUND – GROWTH Rs. 5000
    5 IDFC PREMIER EQUITY FUND – REGULAR PLAN – GROWTH Rs. 5000
    6 AXIS EQUITY LONG TERM – ELSS FUND Rs. 3000

    Thanks and Regards
    Anil

    • Dear Anil,
      You may continue with your SIPs.
      Only one suggestion, consider replacing one midcap fund with a balanced fund. (You may replace IDFC premier with HDFC Balanced fund / HDFC Prudence fund).

  • Hi Mr Srikanth,

    I just gone through your blog and found informative. My age is 37 years. I am new to Mutual Funds and studying about mutual funds by reading some articles online. I want to invest through SIP for my retirement and Children education. As of now i can invest monthly Rs. 10000/. My preferences are like this –
    1. HDFC Balanced Fund – Rs. 4,000
    2. Franklin India High Growth Company – Rs 3,000
    3. ICICI Focused Blue Chip – Rs 3,000.

    Please advise can I go ahead.
    Thanks

  • Hi sreekanth,
    I am new in mutual fund investment.
    I started 3000 rs sip in hdfc top 200growth and 2000 in axis mid cap growth since last month….please suggest is this mf OK?
    Also my planning is to get around 5 lack after 3 years and after 15-18 years around 1cr……
    Please suggest how much more I have to invest in sip and which plan to achieve my goal…..
    Thanks

    • Hi Sreekant ,

      I have listed on Monthly plan of 40K , Planning for Long period , close to 15 Years .Kindly have a look and revert back if it is correct.

      PLAN

      1 FRANKLIN INDIA BLUECHIP (G) 4000
      2 ICICI PRU FOCUSSED BLUE CHIP (G) 4000
      3 FRANKLIN INDIA PRIMA PLUS FUND (G) 4000
      4 ICICI PRU DYNAMIC FUND (G) 4000
      5 HDFC MIDCAP OPP FUND (G) 4000
      6 RELIANCE EQUITY OPP FUND (G) 4000
      7 HDFC BALANCED FUND (G) 4000
      8 ICICI PRU BALANCED FUND (G) 4000
      9 PPF 5000
      10 RD 3000

      Kindly guide me with your inputs. And wanted to know “Now any funds which you can suggest specific to initiatives taken by Govt related to railways,roadways , air , sector .

      Thanks
      Sumit Ghosh
      9168116444

      • Dear Sumit,
        All most all the funds are decent ones.
        But i believe you have picked two funds from each fund category, which can be avoided.
        You may choose either 1 or 2, 3 or 4, 5 or 6, 7 or 8.

  • Hi Sreekanth,

    Thanks a lot for this blog!

    I have a query…. Suppose I invested 1 lakh in balanced (equity oriented) fund in 2014 – 2015 which has completed a year. Now for this 2014-15, amount of 1 lakh (deposited amt) and the return (whtever comes) will be completely tax free right? So I mean, i shoudlnt consider this 1lakh which calculating IT returns for 2104-15? Please confirm

    • Dear Rushabh,
      The taxes come into picture when you redeem the units.
      If you have held the units of equity mutual funds (including equity oriented balanced funds) for more than a year, the maturity amount is exempted from taxes. Long Term capital gain taxes are not applicable.
      You can ignore the notional profits while filing your Income Tax Returns.

  • hi Sreekanth,

    I have to invest 8000 per month in two MF,
    i m looking forward to equity based MF
    a) franklin tax saving/reliance tax saving
    &
    Second investment
    b)which is something more sure/secures like debt or balanced.
    Suggest me which fund in both a) & b) are better to invest 4000 each as SIP.

    Expected Time horizon for 5yrs & 10yrs.
    Suggest me time horizon with preferred funds also & also tell which of them are EEE (tax exempted)

    please help me.

  • dear, I retired in the year 2014 at the age of 58. I will complete 60 years in 2016. I would like to invest in Balance fund equity oriented. I am new in MF. I would like to invest at once some of the amount for minimum 3 years. Pl advise me.

  • Dear sreekant,,,,For my child education I have selected 3 fund icici focused bluecheap,mirae India opportunities and hdfc midcap with horizon of 15 year .but I seen your article’ Best Balance fund’ in that hdfc children gift fund was best,,my question is should I start investing in above said three fund or in Hdfc children gift fund?my investment amount 7000 per month

  • Thanks for the helpful article..

    I’m new to this.. And I wanted to do some investment in ELSS..

    I want to keep it invested for around min 10 yrs or maybe more
    I had chosen the following funds to invest Total Rs 20,000/-

    HDFC Balanced Fund – Rs 5000
    Axis Long Term Equity Fund – Rs 5000
    ICICI Prulife focused blue chip fund – Rs 5000
    HDFC Top200 – Rs 5000

    I have a few questions:
    1. Are these funds Ok to invest in? If it is wrong please suggest some other fund but total 20000 has to be invested.
    2. If I do Lump Sum this month and then can I start a new SIP in the same fund from April 2015?
    3. If I choose a SIP of Rs 1000 pm in any fund and after paying for 5 months can I stop paying and let it be invested for 10 years??
    4. To start these funds, whom or where do I go? I mean should I go to HDFC Bank or some other place??

    PLEASE HELP!!

    • Dear Platine,
      The funds that you have shortlisted are good ones. Do you want to invest in ELSS funds only? (in your comment, you mentioned that you want to invest in ELSS).
      In the listed funds, only Axis long term equity is ELSS. Hope you are aware of it..

      1-All funds are ok. Since you are new to MF investments, do not get worried when you see negative portfolio returns. Ready to accept and understand the volatility.
      2-Yes you can start SIPs in the same funds
      3-Yes, you can pause/stop the SIPs (more features are available based on the distribution /online platforms you opt for..)
      4- If you want to invest DIRECTLY, visit the websites of each Mutual fund house and invest directly. The returns on Direct plans are lit bit higher than regular funds. You can also consider other options like – icicidirect.com, fundsindia.com etc., (Online brokerage houses like icicidirect may charge you fee based on each SIP, whereas fundsindia.com do not charge their clients)

      Let me know if you need more details. All the best!

      • Thankyou very much for your quick response.

        I did not know that the others are not ELSS, then what are they called??

        I had gone to HDFC Bank to ask them about HDFC balanced growth and they told me something about HDFC ProGrowth Plus with premium of Rs 25000 yearly.. Now when I was reading at home I came to know that is a ULIP Plan.. So can I stop it?? They already did the transfer but I have to still give them my documents.. There is some free look period right?? Will I get the full 25000 back??

        • Dear Platine,
          ELSS funds have 3 year lock-in period. You can not redeem mutual fund units allotted under ELSS before 3 years. ELSS funds are tax saving plans, you can claim these ELSS investments as tax deduction under section 80c.
          The other funds (HDFC balanced, ICICI Focused & HDFC Top200) are just Equity oriented funds.

          The good thing that you have done was – ‘you came back home and did research, and realized that it is ULIP.’ Yes, it is an Unit Linked Insurance Plan.

          Did you submit the proposal form? How can they transfer the funds without you submitting the required documents?
          You have 15 days free look period (15 days from the date of receipt of policy bond/document). You can terminate/cancel the policy but they may deduct nominal charges and return you the premium.

          If your requirement is MF investments, suggest you not to buy an ULIP plan. (Meanwhile, take photocopy/screen prints of the fund transfer).

          (You may read my article on this topic. I published this post very recetnly..”Banks as Insurance agents – Is it a good idea?)“

          • I will definitely stop the Ulip.. They made me to sign of those papers, but I have not given them Pan Card Photo, Nothing,. I was suppose to give tomorrow.. and after 2 hrs i got a sms stating 25000 was transferred. How much approx is this nominal charge??

            Thanks Will keep you updated on what happens..

            • Dear Platine,
              If possible let them know that you wanted to buy Mutual funds and not an insurance plan, let’s see what they had to say..escalate this issue.
              These charges will generally be very nominal (charges towards – stamp duty, courier,administration etc).
              This is a classic case of banks misselling an unwanted insurance plan.

              • Yes and I even mentioned the name of HDFC Balanced Fund and she told me that there are 5 that I can choose from and without I choosing anything they just do a transfer of the amount.. I will surely escalate this to the higher authority. I really feel cheated.. I went for something and they trapped me in something which I just don’t like..

                • Dear Platine,

                  When she (Bank staff) meant ‘5’, she may be referring to the fund options that are available under HDFC ProGrowth Plus ULIP.
                  Yes, you have the right to escalate it. How can they take their customers for granted?

          • Hi,

            These HDFC people are crazy.I have told them i want to invest in ELSS still they kept telling me about HDFC pro growth plus and forced me to take it.

            I told them straight,I will strictly follow what i have decided.I do not need HDFC pro growth plus now.I may think of it next year.When those two agents tried everything to convince me and it seemed to them am not convinced.They started saying Sir its about our performance if you can please invest in this one you will get tax relief also why you are going for ELSS 😛 I said them again please help me in investing in the ELSS i have already finalized i do not need your plan now.

            They can surely issue a refund to you.Complain to Branch Manager and explain how they forced you and if not solved you gonna go for police complain.

            Sreekanth,

            I have invested in Axis long term equity (Growth ) – 12000 lumpsum and Reliance tax saver(Growth)-6000

            Let me know if it was a right decision.And Sreekanth is this HDFC life pro growth plus is of any use really?I mean worth the investment if compared to Reliance Tax Saver or Axis or other good performing Equity Mutual funds.

            For the financial year 14-15 i am eligible for refund of all the TDS deducted from my salary.Will be submitting ITR for the same.

            Thanks

  • Hi,

    Be it any fund (Equity/Debt/Balanced), what is the minimum period we need to hold on to it before redeeming it so that the maturity or final fund value will be TAX FREE ?

    I would like to have clarity.

    • Balanced funds’ and equity funds’ capital gains are tax free if they are held for more than 1 year. Debt mutual funds/Gold funds/Fixed Maturity Plans (all non-equity funds) should be held for 36 months to get tax free returns. (Equity Funds are the funds which have atleast 65% exposure to Equity).

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