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Long-term Fund Investments

Tinesh Bhasin wants to invest in equity diversified schemes for the long-term. He asks us to review his choices

I want to invest Rs 4,000 every month in two equity diversified schemes with a 5-year time horizon. I have selected DSPBR Top 100 Equity and Reliance Growth. Please correct me if you feel there can be better funds.
- Tinesh Bhasin

The key is to evaluate past performance and look for consistency. Although past performance is no guarantee of future performance, it is a useful way of assessing how well or badly a fund has performed in comparison to its stated objectives and peer group.

Your choices are good. But it should be noted that Reliance Growth is a mid-cap fund and mid-cap funds are inherently volatile. Your decision of whether or not to invest in this fund must be in conjunction with your overall portfolio so that your exposure to mid-caps doesn't go awry. In such turbulent times, large-cap funds should ideally be preferred.

You can choose four-star or five-star rated funds with a proven track record. If you want to invest in equity diversified funds, you can choose from Birla Sun Life Frontline Equity, DSPBR Top 100 Equity, HSBC Equity and HDFC Top 200.

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