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Should I Stay Invested?

Dhirendra Kumar answers investment queries

Value Research CEO Dhirendra Kumar talks about mutual funds & investments every week on an investment show. Here he answers investors' queries & concerns. Here are a few excerpts:

I want to invest Rs 2000 every month. Please suggest which fund should I invest in?
You may opt for any of the Five Star or Four Star rated diversified equity funds like Magnum Contra, HDFC Equity, Kotak 30 and Birla SunLife Frontline Equity and invest through an SIP. These funds have a proven track record and will be good for long term investment.

How can I get monthly income from a mutual fund?
To get monthly income from mutual funds you may opt for an MIP. An MIP is a debt oriented fund with an equity element in it. It will give you regular monthly income and also you can make equity gains when the market is bullish. If you an invest horizon of 2-3 years and look for a regular monthly income, then an MIP will be a suitable investment. You can choose from MIP’s like DBS Chola MIP, Principal MIP and HDFC MIP Long-Term.

I want to invest Rs1000 per month in SIP of Reliance Equity Advantage Fund & Reliance Natural Resources Fund. Which is better?
Both Reliance Equity Advantage Fund and Reliance Natural Resources Fund are relatively new funds which makes it difficult to comment on their performance as of now. You may instead opt for the older funds which have a proven history as it would be less risky. Choose among Five-Star or Four-Star rated equity funds like Magnum Contra, HDFC Equity, Birla Sun Life Frontline Equity and Kotak 30.

Which is the best fund currently from Reliance Fund House for an investment of three-five years? You can opt for Reliance Growth which is a Five-Star rated fund and has proven performance history. The fund is a good choice for a long term investment.

I am a 34 year old new investor. Please suggest where I should I invest Rs 10 lakh so that after 20 years I have enough money for my daughter’s education.
Invest in Five or Four Star rated diversified equity funds like Magnum Contra, HDFC Equity, Kotak 30 and Birla Sun Life Frontline Equity .Opt for SIP and invest the amount periodically. Divide your investment among four or five funds and rebalance your portfolio every year.

I have invested in Reliance Vision Fund and Franklin India Flexi Cap through SIP from January 2008. Should I stay invested in them?
Both Reliance Vision and Franklin India Flexi Cap are Three Star rated funds. Monitor their performance closely if you wish to remain invested. Or else you may move out of them and consider investing in Five or Four star funds like Magnum Contra, HDFC Equity, Kotak 30 and Birla Sun Life Frontline Equity.

I have invested in HDFC Equity, HDFC Prudence, HDFC Top 200, Reliance Vision, Reliance Growth, Magnum Contra and magnum Global. Should I stay invested or make an exit?
You have got the best collection of funds in your portfolio all of them being well rated funds with a proven performance history. Stay invested and rebalance your portfolio every year.

I started an SIP in Fidelity Equity in 2006. Should I continue with it ?
Yes, Fidelity Equity is a Four star rated fund and is good for long term investment so you can stay investing but keep monitoring the performance of the fund regularly.

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.

Is Quantum Long Term Equity Fund an open-end or closed-end fund ?
Quantum Long Term Equity Fund is an open-end equity diversified fund.