VR Logo

Good Funds to Invest

Value Research CEO Dhirendra Kumar answers investors' queries on Fund ka Funda, a weekly finance show on Star News. Here are excerpts

Direct: Dhirendra Kumar answers some queries posed to him on Fund ka Funda on Star News

How is NAV calculated?
The NAV or Net Asset Value per unit can be calculated by dividing the value of its total Net assets by the number of shares outstanding.

I want to invest Rs1000 per month in the growth option of SBI Blue Chip Fund for the next 20 years for my daughter's education. My daughter is nine months old. Is it a good option?
SBI Blue Chip is a relatively new fund launched in January 2006.The fund has offered a return of 43% in 2007. Its returns have been slightly below average. You need to monitor its performance closely if you wish to invest in it, or instead you may consider any of the well diversified Five Star or Four star rated funds with proven track record. You may choose from funds like Birla SunLife Frontline Equity, Magnum Contra, HDFC Equity and Kotak 30.

I wish to invest in Tax Saving Funds. Please suggest some good funds in this category.
For tax saving you can choose from funds like Sundaram TaxSaver, Magnum Taxgain, HDFC Tax Saver and Birla Equity Plan. These are well-rated funds with a proven track record.

Is it feasible to invest in Magnum Contra Fund at present?
Yes Magnum Contra is a Five Star rated and has offered high returns in the past and has a proven performance history. You may consider it for a long term investment.

I wish to invest Rs 1500 for the next eight years. Suggest me some good equity schemes. What will my investment amount to after eight years?
You may choose from among the five star or four star rated equity funds like HDFC Equity, Kotak 30, Birla SunLife Frontline Equity and Magnum Contra and invest through an SIP. It is difficult to assume the return of any equity fund over the next 8 years. But assuming an average return of 15% your monthly investment of Rs 1500 will amount to around Rs 270,000 in eight years.

Reliance Growth or Reliance Vision, which of the two funds is better currently?
Both Reliance Growth and Reliance Vision have done well in the past. But currently the returns of Reliance Vision has slipped down and its has shifted from a Four Star to a Three Star rated Fund. Currently you can opt for Reliance Growth which is a Five Star rated fund and is a good option for a long term investment.

I am a new investor and I wish to invest in Mutual Funds. Please lend me your advice.
First of all, invest systematically through SIP. It helps to average out the cost of purchase over a period. You may opt for a Five-Star or Four-Star rated diversified equity fund with a good track record. Consider these; HDFC Equity, Kotak 30, Birla SunLife Frontline Equity and Magnum Contra.

Please suggest me the best three mutual funds to invest in which will double the money in two years.
It is very difficult to assume the return of equity funds for the next two years. But you may opt for well rated aggressive equity funds like DSPML Tiger, Kotak Opportunities, Reliance Growth and ING Domestic Opportunities.

How can I purchase an equity fund?
You can purchase an equity fund either directly to save the entry load or indirectly from the agents or distributors. Direct purchase of funds can be made online through the AMC's website or from its collection centres and investment service centres.

Is it beneficial to invest in Reliance life's total investment plan series 1- insurance?
ULIPs are not smart investment options. They carry high associated costs. It is better not to mix investment with insurance. You should rather consider a good equity diversified fund for investment than going for ULIPs.

How many funds should be there in an investor's portfolio. Also tell me how is the Reliance Regular Savings Fund?
The optimum number of funds in one's portfolio varies on the basis of factors like amount of investment, period of investment, diversification required etc. But it is always better to have less number of funds which can be managed conveniently and efficiently rather than going for too many funds. Coming to the second part of your question, Reliance Regular Savings fund has given return of 56% in 2006 and 93% in 2007. For both the periods it has offered returns higher than it's category. Its performance has been above average.