I have subscribed to Reliance Growth, ICICI Infrastructure, HDFC Growth, Sundaram Equity Multiplier Birla Sun Life Tax Relief ’96 and a couple of more funds. I want to exit from one of them. Which should I choose?
If you are referring to Reliance Equity growth Plan then, this has not proven to be a performing fund and it would be worthwhile to get out of it. Likewise ICICI Infrastructure has been through its best period and it is still in profit. The very recent performance has not been very interesting. It can be another fund which is worth getting out. Sundaram BNP Paribas though has a lot of good funds, its Equity Multiplier has not been the top or best performer. If I had to choose three funds to get out of, then it would be these three.
Should I invest in a ULIP?
The Birla Sun Life’s Dream Plan is a big dream. When you buy a ULIP, then it becomes a very expensive way of investment. In most of the ULIPs you get a very minimal insurance cover and most of your money goes for investment. And when it is invested, it proves to be more expensive when one compares them to mutual funds. The liquidity is also less.
However, there is an internal flexibility as you can shift from growth fund to balanced fund or move to bond funds which is an advantage. Returns in ULIPs are less.
If investment is a necessity then you should do so in mutual funds and if insurance is your necessity then a good insurance cover can be sourced through a term plan. One must also think before taking an insurance as what kind of insurance one needs. If you are not there tomorrow, how much money would your family need.