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Choosing the Best

Here’s how to retain your best fund investments

I am running an SIP worth Rs 1,000 in these six funds - HDFC Top 200 DSP BR top 100, Kotak 30, Sundaram Select Focus, Reliance Regular Savings, Sudaram Tax Saver. How do I retain three best funds amongst these and increase SIP to Rs 2,000?

All six funds are good but selection of three and watching their behavior in the future is a bit difficult. However if one really has to choose, then the first three funds, HDFC Top 200, DSP BR top 100, Kotak 30 or even Sundaram Select focus can be taken. First they are very well chosen funds and they have been consistent performers. Long term performance has also been superior. But if four funds instead of three are chosen, then there would no chance of compromising on any front.

I have a scheme in ICICI Prudential Life Insurance (ULIP) and giving Rs 1,500 monthly for three years in turn saving around Rs 56,000 in three years. Is it a good time to get the money out or wait?

As this investment is in ULIP, it helps in getting two things. First investment of the money is done in the markets maybe, around Rs 1,200-1,300 every month. The rest of the amount is utilized in paying the insurance premium.

So whatever one has invested in the last three years, ascertaining its value is not easy. But in the last 2-3 years, we have seen the markets go downhill.

ULIP costs more in the initial years but the costs go down in the subsequent years. So it is the result of the downhill and less money was given in those years. It is always advisable that ULIP is not a good option for investment and one should never mix insurance and investment together. So one must look minutely and comprehensively if in need of insurance.

The advisable thing is to go for term insurance. As for investments, select good mutual funds or if one has to go on one’s own, buy a good bond or equity. In the coming days, think about the necessities with clarity and evaluate these aspects. Take the money out and select in a good fund and continuously invest in that.

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