The mutual fund aficionado | Value Research Having experimented with fixed income and even stock trading, Jayabrata has found investing in mutual funds to be most convenient and rewarding
How I Did It

The mutual fund aficionado

Having experimented with fixed income and even stock trading, Jayabrata has found investing in mutual funds to be most convenient and rewarding

Hailing from a quaint village nestled somewhere in Burdwan district of West Bengal, Jayabrata Panda, a young techie, has a different life today in the skyscraper-studded skyline of Hong Kong. But his passion for investments remains intact. If anything, his approach towards making money has changed for the better. He has realised that fixed deposits - his first investment during college days - are an inferior product. Panda, who married his friend Anima about three years back, is a big-time mutual fund aficionado. That is also the reason why he remains indebted to Value Research.

Jayabrata, who lived with over twenty family members in the same house, wasn't obviously born with a silver spoon. "My father and uncle had a kirana shop started by my grandfather," he says. But he didn't let his modest upbringing affect his studies. He was a topper in school and got a job with an IT MNC. Hong Kong happened soon after. "This helped me a lot to establish my financial position and gave some extra boost to my investment goals," says Panda, giving an important lesson for those youngsters who fritter away extra money.

Since money was not plenty when he grew up, he understands the value of every rupee and making money earn more money. But it was not until around 2008-09 that Jayabrata started gaining interest in financial products and personal finance. Slowly he got used to and became more comfortable with online banking, e-commerce and online investment.

"During my college days, I remember I saved some money and had an SBI fixed deposit of Rs 10,000 for one year and got Rs 984 as interest income. That was the first and the last fixed deposit I had. At that time, I was also interested in some other investments like shares and mutual funds but was not able to proceed with them due to limited knowledge. Around 2009, I started trading shares in my father's account but lost money as I didn't keep a proper track of my holdings," confesses Jayabrata.

For somebody, who used to save money in a piggy bank during school days, losing money in share trading was a major disappointment. "I stopped share trading in 2012 with no loss/no gain situation and exited from my holdings, acknowledging that it was a tedious task to proceed with and get success," he adds.

In 2013, while surfing the Internet, Jayabrata got connected to Value Research. "Value Research was my first guide to personal finance and mutual funds. Even now it helps me a lot in enriching my knowledge and staying updated about the current market situation, along with clearing confusions during the ups and downs of the market. Mutual Fund Insight provides great articles on the current affairs of the financial sector. I especially like the articles and editorials written by Mr Dhirendra Kumar," says the young lad.

With the help of VRO ratings and the knowledge he gained, the software professional started his first investment of Rs 20,000 in an ELSS (ICICI Prudential Long Term Equity Fund erstwhile ICICI Pru Tax Plan) to save tax in FY2012-2013. Slowly, he added two more ELSS (Axis Long Term Equity and Franklin India Taxshield). He is sitting on over 13 per cent CAGR gains.

For his equity and retirement portfolio, Panda has a bevy of funds in the large-cap (ICICI Prudential Bluechip Fund erstwhile ICICI Pru Focused Bluechip Equity erstwhile and Aditya Birla SL Frontline Equity), multi-cap (now flexi-cap - ICICI Pru Value Discovery, Franklin India Focused Equity Fund erstwhile Franklin India High Growth Companies and Mirae Asset Large Cap Fund erstwhile Mirae Asset India Opportunities), mid-cap (HDFC Mid-Cap Opportunities), small-cap (Franklin India Smaller Companies) and sectoral themes (ICICI Pru Banking and Financial Services and Franklin Build India).

Jayabrata, unlike many, lunged towards debt funds at an early age. He says the debt portfolio is for the short term and emergencies, while the equity portfolio is for tax saving and to buy his own home in Kolkata. He has 46 per cent of his money in debt, and the rest in equity.

"I have never done any fixed-date SIP but I have planned my own systematic investment. Since 2013, I have been investing every month in equity and debt portfolios irrespective of the market condition," he says.

Jayabrata now understands the importance of goals. He started goal-based investments in 2013. Before that, he was just saving the surplus amount in bank deposits or the PPF to save tax. "That saving was not with any specific goal. With mutual funds, I have shifted from that mode of savings to having targets. Then I calculated the investment amounts required to achieve those targets. Now, I don't have any fixed deposit or bank-recurring deposit. Other than the EPF and the PPF amount which I locked earlier, 100 per cent of my investment is in mutual funds only. I am very much comfortable with that," he remarks.

For short-term financial goals, he uses Reliance Money Manager (now Nippon India Money Market Fund), which gives him the facility of instant redemption or withdrawal with an ATM card, along with higher returns. He says his satellite portfolio of ultra-short-term bond funds is where he invests his surplus amount.

He has never withdrawn his investments just because their value was going down. He believes that "it's all part of the game". But he does take VRO ratings very seriously and makes adjustments to his portfolio according to them. For instance, based on the VRO rating of a fund and return comparison with its peers, he decided to move out of the fund. "For example, I shifted out of Reliance Equity Opportunities now Nippon India Multi Cap Fund, SBI Emerging Businesses now SBI Focused Equity Fund, UTI Opportunities now UTI Value Opportunities Fund but invested that amount in a different better-performing fund of the same category," says the Value Research fan.

He confesses that share trading and buying a sub-optimal insurance product were mistakes. "I took a decision to invest in an LIC endowment plan. A term plan could have been a better and smarter option," says Jayabrata.

Slowly, Panda wants to increase his allocation to equity to 75-80 per cent. But his goals of buying a house (probably quickly) and building emergency portfolios have made him keep his date with debt.

This story first appeared in February 2017.

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