I'm a first-time investor. I wish to pit aside Rs 5,000 every month for a period of 3-5 years. I have shortlisted SBI Emerging Businesses and HDFC Prudence. Have I made the right choices? -Vinay Gupta
Both of the funds you've shortlisted are good, but they're not the right kind of funds given your investment timeframe and profile. These funds will face ups and downs and you'll end up being disappointed with the experience. SBI Emerging Businesses can be a blockbuster or a disaster, which makes it inappropriate for a first-time investor investing for 3-5 years. HDFC Prudence is a balanced fund, but it's equity allocation is heavily into mid-cap stocks, which makes it inappropriate for you as well. You would be better off with a couple of balanced funds that have a conservative equity allocation. Go for Franklin India Balanced and HDFC Balanced.
This article was originally published on April 22, 2014.
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