Best Mutual Funds to Invest in 2012 in India

If your exiting mutual fund portfolio is bleeding or you are still struggling to make your first investment – list of Best Mutual Funds to Invest in 2012 may help you. I have covered 12 diversified equity funds & couple of debt funds in this list so that you can make a proper diversified portfolio.

I have also attached consolidated factsheet of Best Mutual Funds at the end of this article – this includes investment objective, past performance, ranking in their category, chart, expense ratio, sector/stocks these funds have invested in and some other relevant information.

Best Mutual Funds to invest in 2012 – Equity Funds

Best Mutual Funds to Invest in 2012 in India
Any fund with holding of more than 65% in equity can be considered as an equity fund. But to keep things simple I have just taken 4 categories of diversified equity funds & ignored balanced funds, sector funds, international funds or Equity Linked Saving Schemes. Equity funds are divided according to Market Cap (size of the company).

If you are still not convinced with Mutual Funds – you should read Magic of Systematic Investment Plan (SIP).

Best Mutual Funds to invest in 2012 –Large Cap Funds

Mutual Funds with more than 80 per cent of assets in large-cap companies over the last three years are added in this category. Large cap funds can provide stability to any portfolio.

Best Large Cap Mutual Funds








DSP BlackRock Top 100 Equity -8.07 -5.03 -16.07 -20.02 17.76 8.03
Franklin Templeton Franklin India Bluechip -5.36 -2.45 -11.64 -16.65 22.83 7.44 25.86
ICICI Prudential Focused Bluechip Equity -4.07 -0.07 -10.91 -14.5 26.67
Category Average -5.5 -2.29 -14.6 -21.56 14.64 3.32 16.6

Best Mutual Funds to invest in 2012 –Large & Mid Cap Funds

Mutual Funds between 60 to 80 per cent of assets in large-cap companies over the last three years. They are definitely bit aggressive than large cap funds but still can get part in conservative investor’s portfolio.

Best Large & Mid Cap Mutual Funds








Fidelity Equity -5.99 -4.64 -13.88 -19.28 23.04 7.69
HDFC Top 200 -6.02 -4.44 -16.79 -22.21 22.74 9.65 28.87
UTI Opportunities -3.77 0.04 -6.33 -10.80 27.61 12.87
Category Average -5.79 -4.13 -14.74 -21.65 15.62 2.88 18.8

Best Mutual Funds to invest in 2012 –Multi Cap Funds

Funds with between 40 to 60 per cent of assets in large-cap companies over the last three years are categorized under Multi-Cap. It’s been noticed that Multi-caps funds also keep moving from one category to other as couple of month’s back Reliance Equity Opportunities was in Multi-Cap category but now it is part of Mid & Small Cap funds.

Best Multi Cap Mutual Funds








DSP BlackRock Equity -9.42 -9.89 -19.34 -24.19 19.42 7.95 26.81
HDFC Equity -9.42 -9.89 -19.34 -24.74 24.87 8.79 28.16
Quantum Long Term Equity -9.42 -9.89 -19.34 -18.89 27.78 9.86
Category Average -9.42 -9.89 -19.34 -23.58 17.47 3.78 22.79

Best Mutual Funds to invest in 2012 – Mid & Small Cap Funds

Funds with at least 60 per cent of assets in small and mid-cap companies over the last three years will come under this category. Mid & Small Cap Funds are very volatile in nature but has delivered better returns over long period of time.

Best Mid & Small Cap Mutual Funds








Birla Sun Life Dividend Yield Plus -6.69 -7.64 -13.82 -18.51 25.62 11.75
IDFC Premier Equity Plan A -6.15 -8.96 -11.53 -17.34 28.95 16.44
Tata Dividend Yield -5.27 -1.48 -13.48 -16.19 26.44 11.30
Category Average -7.16 -9.20 -17.95 -25.24 18.84 0.90 21.56

Rational behind selection of these funds is five star rating from value research – ratings can give you first level check to fund selection.

Best Mutual Funds to invest in 2012 – Year on Year Returns

You can see year on year performance to check the consistency of the funds.

Best Mutual Funds

Performance of different equity fund categories

You can clearly see that multi-cap & midcaps have given better returns than large cap but were more volatile.

Best Mutual Funds to invest in 2012 – Debt Mutual Funds

The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors.

Read – Debt Fund Guide

Best Mutual Funds to invest in 2012 – Short Term Fund

Short-term plans invest in shorter dated paper, i.e. debt paper with lower maturity. There is also significant chunk invested in cash/call money. This tends to insulate the fund from volatility in debt markets which impacts longer dated paper. Short term funds invest in debt securities that mature in the next 15 – 18 months. They invest mostly into AAA or AA+ rated debt securities and interest rate hikes mildly impact the returns. Short term funds are best suited for investors with an investment horizon of 1 – 2 years.

Best Short Term Mutual Funds








DSP BlackRock Short Term 0.82 2.13 4.45 8.76 6.34 6.84
Franklin Templeton Templeton India Short Term Income 0.77 2.22 4.53 9.04 8.81 9.14
Category Average 0.91 2.30 4.50 8.74 6.55 7.57 6.92

Best Mutual Funds to invest in 2012 – Monthly Income Plan (MIP)

MIPs are hybrid investment funds. They invest a minor portion (5% to 35%) in equities and the rest into debt securities. They aim to provide regular and periodic income. The income periods can be monthly, quarterly, half-yearly and yearly. But a point to be noted is that the income is not guaranteed. The fund will only be able to distribute income if it has surplus distributable income. These plans are suitable for people looking for regular income rather than capital appreciation.

Best Monthly Income Plans








HDFC MIP Long Term -0.76 0.00 -1.59 0.02 12.67 9.43
Reliance MIP 0.51 0.65 -0.04 0.80 9.57 9.53
Category Average -0.34 0.99 0.69 2.00 7.29 6.11 8.03

Hope this best mutual fund list will give you a point – to start building a good mutual fund portfolio. You can download consolidated factsheet of above mentioned funds by clicking here. If you have questions – feel free to add in comment section.

Disclaimer: Mutual Fund Investments are subject to market risks. Please read the Scheme Information Documents and Statement of Additional Information (SID & SAI) carefully before investing.


  1. Hi Hemant
    A very useful article. However, I feel that you should not have ignored Balanced Funds ( Equity Oriented Hybrid Funds ) as you have already included MIPs. In my view it makes sense to invest in funds like ICICI Prudential Balanced, HDFC Balanced, Canara Robeco Balanced and Birla Sunlife 95 even though these funds do not enjoy Value Research five star rating.
    Under the present condition of the market periodic asset rebalancing is very important. This can be very easily implemented automatically by mutual fund investors by investing in balanced funds.
    Over the last five years, the average equity-oriented balanced fund has given better returns than all diversified fund categories.
    I just want you to consider writing one article on equity oriented hybrid funds since you do not appear to have written on balanced funds so far.

    • Hi Anil,
      I have completed the sentence 🙂
      I will definitely write one article on balanced funds.

      • dear sir,

        i am new in mutual funds or sip methods, my age is 34, i planned monthy invest 1000×3=3000/-, give me advise, which mutual funds is now best fund in sip methods, give me 3 best funds. i need growth funds.


    • Well said Anil… One should not forget HDFC Prudence also which is best in category. Also gilt/bond fund should be considered in 2012.

    • m just 20years old and this is my portfolio.kindly suggest, m i doing good?
      this is my portfolio

      hdfc top200 (1000rs)
      hdfc growth(1000 rs)
      reliance growth retail fund(1000 rs)
      reliance pharma growth fund (1000rs)
      reliance banking growth fund (1000rs)

      reliance gold savings fund(1000rs)

      my capacity of saving is just 6000 per month….

      • You have too much exposure into Reliance. I think you should diversify across other fund houses like ICICI bluechip, DSP Top 100 etc, pick any from the above list but make sure it is diversified across different fund houses as well different categories viz. large cap, mid-cap etc.

        • m investing in too much reliance bcoz agents of Reliance mf and HDFC mf informed this funds are good and never analysed it whether the product is good or not and thats why i asked this question… but anyway thanx vivek

        • m investing only in Reliance and HDFC bcoz agents of Reliance mf and HDFC mf informed me that this funds are good and I never analysed it whether the product is good or not and thats why i asked this question… but anyway thanx vivek… will change this portfolio this feb13 as of now 1 year is not over……

      • its very good that you have started investing at this age..
        but ullu to nai bana raha na bhai???

  2. Hi Hemanth

    Excellent article. I am new to MF & ELSS. Had some ULIPS. Have couple of queries regarding MF. In MF & ELSS switching option is there, like in ULIPS to switch between funds? And do we need to switch between funds in MF also, by monitoring the market conditions?

    Thanks & Regards

  3. Hi Sir,
    it is really very useful article for us in the begining of year 2012. Thanks for it.
    please suggest two fund , one from large cap and other from mid & small cap , monthly SIP 2000 each for period 15 years, i am very confused to select fund listed above.
    please help

    • Hi Kanika
      Since you are very confused I offer my help. You can consider ICICI Prudential Focused Bluechip Equity and IDFC Premier Equity. However do not forget to track the performance of your funds regularly.

    • You can without an iota of doubt go for DSP BlackRock Top 100 Fund and Mirae Asset India Opportunities Fund…..
      Both are very good and have done well even in Bearish phases…

      • Hi Srikanth
        Overconfidence in the performance of funds is not good. Tracking fund performance is very important.

  4. Long Term Debt Funds:

    Why not toinclude GILT and Long term Mutual fund on the list?
    Dobt funds will give mor returns as interest rates will be sliding soon.

    • Hi Vinayak,
      I will be write a separate post on this as gilt/income funds are complex animals for most of the investors.

  5. Hi Anil/Hemant,
    I have been investing on
    1.ICICI Prudential Focused Bluechip Equity
    2.UTI Opportunites Fund
    3.HDFC Opportunites Fund
    4.Reliance Equity Opportunites fund.
    As Hemant suggested ,Reliance equity Opp fund termed as mid & small cap now. Should I stop this SIP and start any one of the above muti fund category?
    Please advice!

  6. Hi Deb
    All the funds in your portfolio are very good. There is no need to stop any SIP. Keep on tracking your funds. Think of getting out of a fund only if it consistently performs poorly over a long period of time. However you can add a multicap fund if you think it is required.

  7. Hello,

    I’m new to investing & was thinking to start my investment journey from new year. But I don’t want to invest in more than 1 funds. Also, I want to try with little money at first, so i was thinking to invest only Rs. 500 or Max Rs. 1000 in above MF as SIP. Can you please guide which of the above fund would be best for me? And do they offer Rs. 500 as in investment?


  8. Hi Hyderali
    Investment in equity mutual funds done to meet your long term goals and you have to remain invested at least for five years to see any meaningful returns. In the short term you should be prepared to even lose your money. You must have risk appetite for investing in equity funds. There is no point in investing without any goal just for the sake of trying.

    • Yes Anil, I’ve goal that is why I’m ready to invest, but its just I want to start with little & yes I’m ready to go with it for more than a year where I can get fruitful returns. Actually, I’m in college & therefore don’t have huge money to invest in diversified funds & wanted to start in atleast one fund. Could please tell me which would be better options to start with?

      Thanks for the reply.

  9. Hi Hyderali
    You can not hope to get any fruitful returns if you invest only for one year in equity mutual funds. Chances are that you will lose your money and will never think of investing in mutual funds again. If you go through the tables given by Hemant you will find that even the best mutual funds have given negative returns in the past one year and even in the past five years the returns of equity mutual funds have not been spectacular. The lesson for you is that investment in equity mutual funds is a long term play of more than five years. I would advise you to stick to only bank/post office deposits for short term investments . Don’t try to burn your fingers by investing in equity mutual funds for short term.

      • Hi Hemant
        Yes, you have pointed it out to me earlier also. Sometimes I just forget to hit the reply button.

        • Hi Anil,

          Really appreciate for your help but I’m little bit confused as I didn’t said anything about equity funds in my previous comments.

          Okay as you said I’ll not invest in Equity mutual funds but which bank/deposit funds are best for short term investments. Please let me know.

          Thanks again for your help.

          • Hi Hyderali
            For short term investment of small amount you can consider bank/post office recurring deposits.

      • Dear Hemant,

        I am planning to invest in the below ElSS funds 1000 each . Would like to know whether it is good decision

        Anantha krishna

  10. Nice article
    want Anil’s & your opinion about Canara robeco equity diversified (G) & ICICI PRUDISCOVERY (G).I have sip in this 2 funds since 2 years & want to continue sip for 10 years.
    Are this good funds?
    Also i want to the returns given in above table are of sip or lumsump investment??

    • Hi Bhavna
      Canara Robeco Equity Diversified is a five star large and midcap fund and ICICI Prudential Discovery is a four star mid and small cap fund. Hence both are obviously very good funds. You can continue your SIPs in these funds. Since your time horizon is for ten years I would suggest that you must continue to track the performance of these funds on a regular basis at least once a year. Some funds do lose their stars in the long term.
      Regarding the returns given in the tables I do not think that these are SIP returns. However, Hemant will be in a position to clarify.

      • Thanx for the reply.
        Where can we get both the lumsump and sip return of a particular fund for 3 to 5 years duration?

        • Hi Bhavana
          You can refer to the fact sheets of mutual funds issued by fund houses to get all the information pertaining to the funds.

        • Hi Bhavana
          Hemant has provided a link which can be used by you to download the condensed fact sheets of the funds. These fact sheets do not provide SIP returns. I am sure SIP returns can be obtained from the detailed fact sheets provided by the fund houses.

  11. Dear Hemant/Anil,

    I am 29 years old and started investing in the below funds thru SIP since last 2 months. I am planning to continue my investment for 10 years.
    Kindly check and let me know any modification is needed. Thanks in advance.

    Large cap
    Franklin India blue chip (Rs.2000)
    Icici focused blue chip (Rs.2000)
    Large and mid cap
    HDFC top 200 (Rs.3000)
    HDFC Equity (Rs.2000)
    Mid and small cap
    IDFC Premier Equity (Rs.2000)
    Reliance gold savings fund (Rs.4000)

    Total: Rs.15000 per month.


    • Your portfolio is well diversified. You can continue investing in them for longer term provided you check the performance of each once a year. You can consider another multicap fund just to avoid bias towards one fund house. However looks like gold is having 25% weight in your overall portfolio which may not be appropriate, normally one should not invest more than 5-10% in gold. Do you also understand the disadvantage, charges etc.. of any of the gold funds?
      Hemant please write article on various gold funds. As i can see many people are now stating SIPs in such funds.


      • Hi Purvesh
        I think Hemant has already written a lot regarding investment in gold and gold funds. Yes, many fund houses have come up with their gold funds last year but it does not make any sense to me. All gold funds are more or less similar.

      • Is having two mfs from the same fund house such a big no-no? Why should it be? Its not like the fund house is going to collapse or something! And in any case most fund houses do have excellent offerings under various categories, so just because its from the same fund house should one be not investing in them? I don’t get the point.
        Could somebody explain the negatives of such investments? For example I do have SIPs in HDFC Prudence and HDFC Equity.

    • Hi Karthik
      I am in complete agreement with what Purvesh has written. Your exposure to gold seems to be on the higher side. Moreover you should not be investing in two funds of the same fund house even if two funds are quite good. It makes sense to retain only one fund from HDFC fund house to have proper diversification across fund houses.

      • Hi Purvesh/Anil,

        Thanks a lot for your valuable inputs. Will modify my portfolio as per your suggestion.


  12. Crisp and to the point article, thanks Hemantji. Past 1 year performance are scary. I wanted to ask you something about how Mutual Funds operate.
    So, every year, does fund house deduct their expenses (expense ratio) from our investment, be it a year of loss or gain, and that continues for the life of the investment, is it?

    • Hi Mansoor,
      They deduct expenses on daily basis from the assets – this does not depend on profit or loss.

  13. Hi Hemant

    I want to know HDFC Prudence Fund comes under which category, many people call it as a awesome MF, but you did not mention anything about this MF, can you please clarify.


      • Hi Anil
        Thanks for your reply.

        So we should invest in Balance Funds or not, because nothing hase been discussed regarding balance funds in the above article.

        Also, What is your suggestions about Balance Funds and INDEX Funds.

        • Hi Anwar
          Please read my first comment at top to get your answer regarding balanced funds. Index funds are passively managed funds. During the last year a large number of actively managed funds have managed to beat the index. Hence it is better to invest in actively managed funds which can consistently beat the index.

    • HDFC PRUDENCE FUND is a “must” in any investor’s core portfolio.
      HDFC Prudence Fund will provide good hedge against sharp equity falls.
      If any investor wants to invest in only ONE Mutual Fund, then THIS is the Fund, the HDFC PRUDENCE FUND.

      • Hi Srikanth
        I am surprised to see your infatuation with HDFC Prudence Fund. While I have nothing against this fund but getting emotionally attached to a fund is surely not a good sign. There can never be a one size fits all type of solution as far as investment in mutual funds is concerned. Every investor has to build his own portfolio based on his requirements and risk profile. No fund can ever become must in any investor’s portfolio.
        Investing in only one fund can never be a sensible approach.Two or three funds are required to have diversification across category of funds and fund houses to spread the risk.
        Herd mentality in investment is not desirable.

  14. Hi Hemant,

    Thanks for sharing this article. But it has left a lingering worry in my mind regarding my SIP investments. I had started investing in May 2011, and since then as you know, the markets have fallen and my capital has eroded by about 10%. I had carefully selected funds based on my appetite, and at the time all were 5 star funds.

    My investments were in HDFC Top 200 (3500), Quantum Long Term Equity (3000), IDFC Sterling Equity (2000), DSPBR Small and Midcap (2000) and HDFC Prudence (2000).

    I had mentally decided many times that I will rough it out and play the waiting game during market crashes, and intend to stay long term. But over time I felt that I made a mistake with DSPBR. I should have just kept one Small&Midcap Fund, and that too IDFC Premier Equity Plan A.

    I am 30 years old with a good risk appetite, and I have diversified in FD for my short term goals and PPF as a long term tax saving debt instrument, and all my insurances are in place.

    My question to you is that, since star ratings keep changing over time, and sometimes nobody is perfect in choosing the perfect fund, some selected funds appear weaker compared to competition which is only noticed months or years down the line. So what should one do in such a situation?

    I hope you understood my question.



    • Hi Sunnydoc
      Yes, I have understood your question and I can understand what you are going through. Last year , the benchmark index Sensex fell 22%. It is inconceivable for an equity fund to deliver positive returns in times like these. The next best thing for funds to do is to atleast do better than the sensex or their own benchmark. The silver lining in the dark clouds in 2011 has been that 58% of the diversified equity funds and 79% of Mid/small cap funds did better than their respective benchmark index. Doing better means falling less in this case.
      Someone has rightly said that equity investing is an art of creating wealth. Unfortunately it does not fit neatly into yearly baskets. Sometimes you may be rewarded very soon and sometimes it takes much longer. The story works because if you buy cheap, you will be eventually rewarded for your patience. You never lose if you buy cheap even though you may make meaningful returns after a considerable period of time.

  15. Hi Hemant & Anil.

    I am long term investor with following portfolio in Mfs. Kindly suggest i m on right way or i have to switch out from some funds?

    HDFC Growth fund 1000 P.M
    ICICI Pru Dynamic Plan 1000 P.M
    ICICI Prudential Focused Bluechip Equity 2000 P.M
    IDFC Sterling Equity 1500 P.M
    Reliance Equity Opportunities fund 1500 P.M
    Reliance Gold Saving Fund 1000 P.M

    • Hi Kawardeep Singh
      Diversification across fund houses is desirable to spread risk. it is preferable to select only one fund from a fund house.

      • Thx Alot Mr. Anil

        I will try to diversify my funds in different fund houses once it complete there lock in period to avoid exit load.

      • Hi Anil,
        Thanks for your advise. Do i need to switch out some funds and buy new funds of different fund house or i have to stop future sip in existing funds?

        • Hi Kawardeep Singh
          Review the performance of your portfolio after you complete one year.Then you can think of exiting the non performing funds and build a new portfolio diversified across different category of funds as well as fund houses.

  16. Hi Hemant,

    I want to take SIP of ELSS can u suggest me which one is gud & is it necessary to open a Demat account for the same.

    • Hi Asha
      Demat account is not required for investing in ELSS mutual funds. You can go for Canara Robeco Equity Tax Saver.

  17. Good selection of funds based on the basics.
    One suggestion to consider the evergreen hero – HDFC Prudence Fund. This really helps an investor with a decent equity, debt mix and takes care of re balancing to some extent.

    • Hi Melvin Joseph
      No doubt HDFC Prudence is a very good balanced fund. One golden rule of investment is that one should never fall heads over heels in love with any fund.Tracking the performance of a fund is very important. During the last year many balanced funds have performed better than this fund.

  18. HI Hemant,
    I am very thankful for your suggestion on mutual funds, may u answer my some of questions? I’ll be grateful to you
    i am investing through S.I.P. in following funds
    ICICI focused bluechip equity retail Fund growth-1000/month
    HDFC equity fund growth-1000/month
    Hdfc top 200 growth-1000/month
    Relaince gold saving fund 1000/month
    Reliance pharma Growth-1000/month
    Idfc premier equity fund groth-2000/month
    Idfc Sterling equity fund-1000/month
    Birla Sunlife Midcap fund groth invested 25000 rupees through SIP now terminated this SIP because it was giving least performance as investment is 25000 but current value is 20240 rupees.

    my question is did i do right to stop BSL Mid Cap fund SIP?
    as you have given return of Mutual funds, is it return thorough SIP or one time investment?
    what are the returns through SIP of these funds?
    Am i carying a right portfolio of Mutual fund SIP?

    Thanks & Regards
    Ashish Bansal

    • Hi Ashish
      Your portfolio lacks diversification across fund houses which makes it risky. You should be investing in only one fund of a fund house. You can get SIP returns from fact sheets of fund houses.

      • Thanks Anil, Y0u mean to say i should quit of 1 fund of a fund house if i am holding 2 funds from a same fund. as i am having 2 funds from HDFC 1 is top200 and another equity growth then from which fund i should quit? same from IDFC i am having 2 funds i.e. Premier equity plan A growth and idfc sterling equity, then from where i should quit. and same in reliance i am having Relaince Gold saving fund and relaince pharma gold, here which fund i should quit, as i have read hare there are some funds which gives tax rebates which fund is giving best return and what return? please answer.
        Thanks & Regards
        Ashish Bansal

        • Hi Ashish
          You can keep HDFC Equity and IDFC Premier equity. Merge other fund of HDFC and IDFC with these funds.
          ELSS Funds are meant for tax saving. Check the returns of the selected fund from its fact sheet.

          • Dear Anil, as i asked u first time also about the returns of mutual fud through SIPs. my question is you showed returns of many mutual funds, these returns are based on 1 time investment or on the bases of 12 instalments of SIPs? like if a fund is giving 30% return in 3 year then this return is on whole 3 year amount including last month’s sip? or its on completion of every instalment’s 36th month, then what is the average returns of these funds through sips. like if i m investing 1000 rupees/month what will be the return and what will the actuall value as per the last performance. i know it’s not sure bcos its based on market but i m asking as per last performance

              • from where i can get the fact sheets of the fund houses to get sip returns?
                in this article i could not find this……
                Ashish Bansal

                • Hi Ashish
                  You can get all information from the fact sheets which are provided by the fund houses.Moreover, you can get information regarding all possible types of returns from Value Research website.

  19. HI Hemant,
    I am investing Rs 1500 monthly through SIP in SBI magnum tax gain. The performance of the fund is not good in these days. Can I stop the SIP or continue? Please advice.

  20. hi anil/hemant my income is 25k unmarried ….as market is very low so cant we invest directly into equities per month 2000 or 3000 rs or its good to go for any mutual fund because so many people told me that your saving will be almost double in 3 years …almost every share is at its low…..please suggest me 2 mutual funds where should i start ….and to whom we have to contact…shall i go by any broking firm or what…..thanks…what should be my overal money if i invest 3000 per month for 10 years in sip…..and what we have to do if we dun wan to continue through the 1 fund…after how many years we can take back our money…

    • Hi Varun
      While it is true that investments in equities have potential to give high returns in the long term, no one can say how much returns you can actually get. You can also lose your money. Keeping track of markets and stocks is not possible for everyone. Mutual funds are a better option. You can start your investments with one large cap and one large and midcap fund. You can get in touch with the fund houses for this purpose.

  21. Hi Hemant / Anil,

    Now i am 30 and i am planning to start my investment via SIP. I planned to invest on the following schemes :

    Fidelity Tax Advantage – Rs.1000 (It will run for more than 10 Years)
    HDFC Top 200 Equity – Rs.1000 (It will run for more than 10 Years)
    DSP BR Short Term – Rs.1000 (As i may need some cash at the end of 2 years)

    I will increase my investment in coming months.

      • Hi Anil,

        So does the ELSS schemes change for every 5 years or so. I am not clear anil as i am just a novice. Can you suggest me a plan otherwise.
        I need a long term equity scheme which i am planning to continue for more than 10 years minimum. Then i need a ELSS scheme for tax saving purpose.

        • Hi Prabhu
          After implementation of direct tax code no tax benefits will be available from ELSS funds. So the fate of all ELSS funds hangs in balance. We don’t know when DTC is likely to be implemented. Let us wait and watch.

          • Thanks for the explanation Anil. So i will pick up one more diversified fund instead of ELSS, which will not impact if DTC is into picture.

  22. Hi Hemant,

    First of all i want to say thanks for all your articles as they provide good understanding of financial planning and
    investment. I have gained a lot of knowledge (atleast to think seriously about investments)
    I am 30 Years old modrate risk taker investor and just started investing in SIP. Following is my SIP portfolio.
    1- Large Cap
    Franklin India Bluechip Fund – 1000/-

    2- Large and Mid cap
    HDFC Top 200 (Equity) – 1000/-

    3- Mid & Small Cap funds
    SBI Magnum Sector Umbrella – Emerging Business Fund – 1000 /-

    4- Balanced
    Canara Robeco Balance fund) – 1000/-

    5- Tax saver
    Reliance Tax Saver Fund – 1000

    6- Dept fund
    Not decieded (Birla Sun Life Income Fund can be an option) 1000/-
    Please review it and give me your suggestion which can help me in future. I still have to decide on one fund (6th one) so i can act accordingly.

    • Hi Ashish Singh
      There is no need to consider one more fund. If you want to make additional investment, it can be made in one of the existing funds. Keep tracking your funds.

      • Hi Anil,
        Thanks for your comment. But I also wanted to know about the diversification of my portfolio according to me (moderate risk taker). I wanted to invest in dept fund so that it can give me some assured return even if market misbehaves 🙂 Can you give your point of view on first 5 performance from long term perspective? I am ready to invest for 15 to 20 years. Increasing an additional amount is not an issue.

        • Hi Ashish
          No fund can give you assured return. For assured return consider bank fixed deposits. You already have some exposure to debt as you have invested in a balanced fund.

  23. Hemanth, Anil,
    Can you please tell us how to exit a fund when it starts loosing its star?
    For e.g. how long should we keep it under watch before deciding to exit?
    How should we exit at one shot or STP?
    Should we stop the SIP as soon as it starts loosing star and keep monitoring its performance?
    As I can understand from this article, 5 and 4 star rated funds are good, then does it mean we need to become alert at soon as a fund becomes 3 star or what is the threshold point?

    I think, having a good strategy for exit is as important as entering into equity MF investment otherwise there is a chance of becoming Abhimunya 🙁

    • Hi Kannan
      I agree that a good strategy to exit is even more important than entry strategy but it is very difficult to implement. There can not be any hard and fast rule applicable to all investors as each investor has to build his portfolio based on his requirements. Same fund in different portfolios can have different significance. Funds in core will probably require different treatment than funds in satellite. It will also depend on the exposure a particular fund has in the portfolio.
      If the funds initially selected for building the portfolio were all five star funds, it is unlikely that all funds will suddenly become two or three star funds. Moreover this is also possible that a three star fund may actually perform better than a five star fund. Star ratings are to be used only as initial filter while selecting the funds.
      It is important to track the performance of all funds in the portfolio atleast once a year. The performance can be compared to the index as well as peers. If a fund performs consistently poorly based on this criteria for a considerably long period, only then should one think of exiting the fund. Performance of past three and five years should be a guide. Short term performance can not form the basis for exiting the fund.
      Initially only the new investment in the fund should be stopped. Redemption should be considered only if the funds are urgently required. Withdrawing money when markets have corrected drastically is not advisable.

  24. Hi Hemant/ Anil,

    I am 28 and married. I havent done any investment in MF/ELSS till now, but want to start as early as possible. My financial goal is to receive surplus amount over long time. For long term saving i am going to invest in PPF.

    I plan to invest 10k/month through SIP in MF. Can you please guide me with the MF investment considering all facts and figures.


    • Hi Shashikant
      Your financial goal is not clear to me. You must be clear about the target amount as well as the time horizon of the investment. If your time horizon is around ten years you can consider investing in diversified equity mutual funds. Select three or four funds of different categories with not more than one fund from each fund house.

      • Hi Anil,

        My i want to invest for around 10-15 yrs and target amount should be 50Lakhs.

        Please provide me the list of MF to achieve the goal.


        • Hi Shashikant
          Select one large cap fund, one large and midcap fund, one multicap fund and one mid and small cap fund from the tables given above.

  25. Dear Hemant / Anil,

    I was started a SIP in IDFC SME MF. But now I found that all sites suggesting IDFC Premier Equity MF for small and mid cap.
    So what should I do now? Should I stop current and start new SIP in IDFC Premier Equity?
    Also in that case what should I do ? leave the money as it is or withdraw ?

    • Hi Kiran
      It is always preferable to ask first and invest later. You can start SIP in IDFC Premier Equity if you want. Normally one should withdraw money only if one badly needs it.

  26. Hi Hemanth,

    to introduce myself I am Archana Kodati, and a fresher in Investment :).
    When searching for best investments into gold, came across your blog. this site is so useful and informative for planning who is on cross road of Investment and not knowing how to save money for greater gains. Thanks a lot. But before getting into it, I would like to know more about MFs and markets, is it possible for you to educate me on the same?

      • Hi Anil / Hemanth,

        After going thru the free e-course and lot of thinking, starting SIP with the below plan, pls suggest if that sounds good

        1- Large Cap – 3 Yrs
        ICICI Prudential Focused Bluechip Equity – 1000/-

        2 – Large & Mid Cap – 10 Yrs
        HDFC Top 200 – 1000/-

        3 – Mid & Small Cap – 5 Yrs
        IDFC Premier Equity Plan A – 1000/-

        4 – Short Term Mutual Funds – 1Yr
        Franklin Templeton Templeton India Short Term Income – 1000 /-

        Also pls suggest how to start these? Can I do it online or meet an agent in any MF company?

      • Hi Anil / Hemanth,

        Thanks a lot for the reply and the free e-course.
        After going thru the e-course and lot of thinking, starting SIP with the below plan, pls suggest if that sounds good

        1- Large Cap – 3 Yrs
        ICICI Prudential Focused Bluechip Equity – 1000/-

        2 – Large & Mid Cap – 10 Yrs
        HDFC Top 200 – 1000/-

        3 – Mid & Small Cap – 5 Yrs
        IDFC Premier Equity Plan A – 1000/-

        4 – Short Term Mutual Funds – 1Yr
        Franklin Templeton Templeton India Short Term Income – 1000 /-

        Also pls suggest how to start these? Can I do it online or meet an agent in any MF company?

        • Hi AKodati
          Your fund selection is good.I find that you have fixed different time frames for different funds. Do you have different goals in mind?Investment in equity mutual funds is done to meet your long term goals.You can hope to get some meaningful returns if you remain invested for more than five years.In the the short term it is quite possible for you to lose your money. Hence, I would not advise you to invest in equity mutual funds if your time horizon is less than five years.If you can increase your investment horizon then you can consider investing in these funds.
          For investing you can approach the offices of the fund houses.

          • Thanks a lot Anil for replying.
            I have a daughter of 1.5 yrs old, all the investment is planned for her at different stages and hence different time frames.
            In the above article I have come accross some short term plans hence thought tht wud be a gud one to opt to meet short term requirements. If MF is not the right one for short term, cud you please suggest what will be the best one?

            • Hi AKodati
              For time frame of up to three years invest only in bank recurring/fixed deposits.
              For time frame of three to five years you can consider investing in some balanced fund like HDFC Balanced Fund.
              For time frame of more than five years consider investing in diversified equity mutual funds.

  27. Hi Hemant,
    great article. can you write something on “Trail commissions” and other innovative ways the agents make money? regds

  28. Hi Shreedhar
    I have recently come across a very interesting article by Monika Halan -In defence of trail commissions.
    A payment gateway that facilitates appropriate compensation for the distribution of and advise on financial products, without being clunky, remains elusive. Can trail commission, with regulatory caps and handshakes, be the way forward?
    You can read it at Mint Money.

  29. Hi Hemant
    It seems age is finally catching up with me. Another instance where I forgot to hit the reply button.

  30. Hi Hemant

    Good article ….

    Please let me know about SBI Magnum Emerging Business Fund in Mid & Small Cap category to invest (SIP mode for long term)

    Thanks in advance ..
    Nagarajan S

    • Hi Nagrajan
      It is a good but risky fund. You can consider it for investment if you have risk appetite.

  31. Hi Hemant n Anil, U both r really doing an awesome kind of an education initiative about investments. Well done. I was new when i started reading ur articles. But now i am understanding the basics. Since i am new, i first want some secure returns, so I’ll deposit in PPFs and FDs. But later on say in 2-3mths I’ll start using MF. Thank u both n pls be educating like this.

  32. Hi Prashant
    Have proper asset allocation in both debt and equity and build a diversified portfolio.

  33. Hi Brother,
    My name is Ravi Age 30. My 9 month daughter name is VIDUSHA. i am planing her marriage @2035. So now i am ready to invest monthly SIP @ rs.2500 on mutualfund @24 years . please tell me which mutual fund (fund name please) is best…i am ready to take risk .

    • Hi Ravi
      You can consider investing in ICICI Prudential Focused Bluechip Equity and UTI Opportunities Fund by dividing the amount. Investing in two funds will spread your risk across two fund houses. Since your time horizon is long it is important for you to keep tracking your funds regularly.

  34. Hi Anil & Hemant,
    Thanks for the great article and sharing your expert views. Recently, I have opened Term &Health insurance w.r.t protection n health guard.
    Now, I want to invest in MF SIP. I’ve plans to invest around 3-4K per month fpr period of 5-10 yrs (it may increase too gradually). But i am totally new to MF n need need your advice.
    After doing some online research like Value Research/Rupeetalk n your article here my selection/picks. Please help me with the money break n whether shoud invest in all this funds some amount or few :

    LARGE CAP : ICICI Prudential Focused Blue Chip Equity
    LARGE & MID CAP : UTI Oppurtunuties
    MID & SMALL CAP : – Tata Dividend Yield Fund
    – Birla Sun Life Dividend Yield Plus – Growth
    MULTI CAP : HDFC Equity Fund


    • Hi Jai
      Your fund selection is very good. Select only one of the two funds in mid and smallcap space. You can invest Rs 1000/- in each of the four funds. Keep tracking the funds after starting your SIPs.

      • Thanks for the update Anil. Currently, i’ve budget of only 3K p.m so can let me know which one to drop. I was also interested in ELSS but bcoz of DTC not sure if make sence to invest only for a year.

  35. […] Financial Literates posted Best Mutual Funds to Invest in 2012 in India – ”The Indian Government has allowed foreign individual investors to invest in India. India […]

  36. Hi..
    Gr8 work TFL. I’m glad that i came to this website before i started investing. I am 27 yrs, just started my career and a novice in the field of MF. I’ve picked few MF to invest from this mnth onwards. Can you comment on my selection. I’m aiming at a long term of 15+ yrs for my child’s eduction/ marriage. I’m also planning to invest in gold ETF later. Thanks in advance.
    DSPBR Top 100 Equity : 1000/ mnth
    ICICI Prudential Focused Bluechip : 1000/mnth
    HDFC Top 200 : 1000/mnth
    Birla Sunlife Dividend : 1000/mnth
    IDFC Premium Equity Plan A : 1000/mnth
    SBI Emerging Business Fund: 1000/mnth

    • Hi docanoop
      I think the minimum investment permitted in IDFC Premier Equity is Rs2000/- per month. Please check it from the fund house. Your fund selection is fine.

      • Hi Anil,
        For monthly Rs.6000 I think Docanoop can select max of two funds. He can invest Rs.3000 in two good funds. I guess to0 many diversification across funds for small amount will not yield good returns. Kindly share your opinion.

        • Hi Karthik
          Yes, I agree too much of diversification is not needed.If you select four funds one from each category,that should be fine.

  37. Hi Heman/Anil

    Can you guys please suggest us a book on Finance & Investment for Beginners.
    I want to study about Mutual Funds, Equity Funds, Debt Funds, Shares and Stocks, and how does a common man start investing in Indian Share Market.

    It will be great help for all of us, and then we can ask you more logical questions 😀

    Thanks in advance.

  38. Hi Anwar
    Instead of looking for a book it will be better if you start reading some personal finance magazines.To start with you can consider Mutual Fund Insight.Later on you can go for Wealth Insight.Both these are from Value Research and contain useful information.
    Personally I feel that if you go through old articles of Hemant, you will not need any other book.

  39. Hi Hemanth/Anil,

    TFL provided me a great idea to start my investments in mutual funds. Keep Going..
    I have decided to invest in these below funds in SIP. Please advice me if this is good selection or need any changes. My age is 30 and my salary is 40,000 and married. I can invest 15000 in a month towards savings.
    Already started my investment in PPF 5000 per month. And having HDFC SLClassic Insurance with a premium of 2500 per month. Please advice on these investments.

    Large Cap Funds:
    DSP BlackRock Top 100 Equity (2000)
    Large & Mid Cap Funds:
    HDFC Top 200 Fund-Growth (2000)
    UTI Opportunities Fund (1000)
    Multi Cap Funds:
    Quantum Long Term Equity Fund – Growth (1000)
    Mid & Small Cap Funds:
    IDFC Premier Equity Fund – Plan A – Growth (1000)

    Expecting you valuable response. Thanks

  40. Hi Kumar
    Your fund selection is very good. I think you will have to probably increase your investment in IDFC Premier Equity to Rs2000/- per month which is the minimum amount permitted.You can check this up with the fund house.

  41. Hi Hemant/Anil,
    I think u miss the below question raised by Karthick, I have also same doubt, please clarify.
    karthick January 18, 2012 at 4:31 PM
    Hi Anil,
    For monthly Rs.6000 I think Docanoop can select max of two funds. He can invest Rs.3000 in two good funds. I guess to0 many diversification across funds for small amount will not yield good returns. Kindly share your opinion

    • Hi Anwar
      Yes, I had missed Karthick’s question.Thanks for pointing it out.It has been answered now.

    • Thnx Anwar for the suggestion. As i said, i’m a beginner and appreciate your valuable suggestions. Can you pl tell me which MFs i should go with and which all to omit? Thanx 🙂

  42. Hi,

    Excellent article. I am 32 yrs old. For the last 1.5 yrs, i am investing around 12000/month on MF SIP. Can you please review and give ur comments on my portfolio:
    HDFC Top 200 (4000)
    ICICI Pru Dynamic (2000)
    HDFC Balanced(4000)
    ICICI Pri Discovery(2000).
    I am planning to invest for the next 10 yrs atleast and looking to increase my investment (3000/ month) on SIP. Could you please suggest some good funds for my portfolio?
    PS : As on date, my portfolio is on the RED.

    • I have added IDFC premier equity (G) -2000/- to my SIP portfolio today. Let me know your views.


    • Hi Sundar
      Your fund selection is good but your portfolio lacks proper diversification.This makes your portfolio very risky. You have two large &midcap funds and two mid & smallcap funds where as there is no pure large cap and multicap fund. Moreover you have two funds each from HDFC and ICICI Fund house.
      You can consider changing your portfolio by including the following funds :
      ICICI Prudential Focused Bluechip Equity
      UTI Opportunities
      Quantum Long Term Equity
      IDFC Premier Equity
      HDFC Balanced
      This portfolio is properly diversified across the categories of funds as well as fund houses.

      • Thanks Mr.Anil for your valuable advice. My next question is how often do i need to evaluate my SIP portfolio if I have long term investment plan (say 10-15 yrs). I am looking to modify my portpolio as given below:
        ICICI Prudential Focused Bluechip Equity – 3000/-
        UTI Opportunities – 2000/-
        Quantum Long Term Equity – 2000/-
        IDFC Premier Equity – 2000/-
        HDFC Balanced – 3000/-
        I am planning to retain HDFC Top 200 – 2000/- since I have some confidence on Mr.Prashanth Jain (fund manager).

        Could you please check and let me know whether it looks OK.


        • Hi Sunder
          While I have nothing against either HDFC TOP 200 or the fund manager as both are good, my advice to you would be not to get emotionally attached either to a fund or a fund manager.Your portfolio already has five good funds and it is properly diversified across fund houses as well as category of funds.Adding one more fund will not serve any useful purpose.It will only amount to over-diversification.
          Tracking the funds atleast once a year is very much required so that corrective action can be taken whenever the performance of a fund is seen faltering.

          • Thanks again for your time. One more question. Since most of my MF-SIP investment is on RED as on date, is it better to withdraw the money fr0m one fund and transfer the deeds to purchase another fund or close and retain the money in the existing fund and start a new SIP. please advice.


            • Hi Sunder
              You have been investing in mutual funds for only the last 18 months.Last year the benchmark index sensex fell 22%. It is inconceivable for any equity fund to give positive returns in times like these.So it is not surprising that your mutual fund portfolio is giving you negative returns.You should not be concerned by this.This is an extremely inappropriate time to redeem your investments. Just stop your SIPs in the funds you do not want to retain in your portfolio and start your SIPs as per your new portfolio.

              • Thanks alot for your advice. As suggested, i have cancelled my existing SIPs(not redeemed) and started new SIPs. Can you please advise on what i should do with the corpus on my existing funds. Do I redeem the money from the existing funds when the return from the investment is on the positive side and reinvest it on the new funds? Please advice.


                • Hi Sunder
                  Normally we go for redemption when either we are badly in need of money or we have better option available for investing.For the time being there is no option but to wait and watch. Remember, investing in mutual funds is a dynamic process. It is quite possible that the funds in which you have discontinued the SIPs may actually turn around and give you good returns later on because they are basically good funds.
                  Moreover it is also quite possible that some fund in your portfolio may lose its shine after a few years. So the key is to keep monitoring your funds and take the call at the appropriate time.

  43. Dear Sir,
    Kindly review my selection and comment/advice.
    I have selected following mutual funds and want to invest around 10000 per month. I have only long term goals. Kindly breakup the amount in following funds:
    ICICI pru focussed bluechip equity fund(g)-Large Cap
    IDFC premier Equity Plan A(g)- Mid & Small Cap
    HDFC Equity Fund(G) – Multicap
    UTI opportunities- Large & Mid cap
    BSL 95 fund ( Balanced Fund)- or Suggest any other in this category( if required)

    Please correct my errors and help me. I will start investing after your precious comment.
    Many Thanks.

    • Hi Inder
      Please read my comment to Sundar above. Your fund selection is good.The money can be invested equally in four or five funds.

  44. Hi Hemant
    I have come across one very interesting comment regarding ULIP of UTI. I would like to know your view on this.
    UTI’s ULIP is Different
    UTI’s ULIP is different from the other ULIPs, in which you invest a fixed amount and you get insurance for a very less amount. UTI’s scheme is predominantly a mutual fund, and 2.25 per cent of your invested money is considered as insurance premium.
    We have always advised investors to not mix insurance with investment. But if you consider the UTI ULIP to be a mutual fund, you get free insurance coverage from it because any mutual fund charges around 2.25 per cent as fees.

  45. hello sir, i want yo make a sip of rs 3000 pm in hdfc top 200 mf. how can i invest in this plan and where and to whom should i contact . can i make sip through internet banking or should i pay cheque for that.

  46. sir can u please suggest me that whether to go for value averaging investment plan(vip) or sip…..because peple r saying that vip is giving much better returns than sip…..thanks

  47. Dear Sir,
    I have a query..It may sound stupid but its creating doubt to me.
    As per your advise, I have started SIP last week in 3 funds and registered these SIP’s for 120 months.
    Now, my doubt is- If I wish to continue SIP after specified time of 120 months, then what I will have to do? Register again for SIP of same fund or I can extend the same SIP.? I mean that will the new units get added to earlier accumulated units or the new SIP will start accumulating from zero again?
    Does extending the SIP later, affects Compounding Power?
    Which is better way, elongating the interval now at starting, or later, or both options are equivalent???
    kindly clear my doubt. I wish to invest for 20-25 years.
    Thanking You.

    • Hi Inder
      Whenever you invest in any fund of a fund house a folio number is created in your name. With that folio number you can invest anytime in any fund of the fund house. It is always possible to increase or decrease the duration of the SIP. Initial tenure of the SIP is not important. A couple of months before the expiry of the tenure of your SIP you get the forms from the fund house for extending your SIP. You can avail the facility if you want. It does not make any difference whether you extend the same SIP or start a new SIP. So long as your folio number is same all the units are reflected in the same statement.

  48. I am 34 years, new to SIP investiments , my target 13 years for son eduction , monthly Rs 6000 at the moment.
    Franklin India Bluechip OR ICICI Pru Focused Bluechip Eqty (G) – Rs 2000
    HDFC Top 200 – Rs2000
    IDFC Premier Equity – A (G) – Rs 2000
    Could you please suggest above my port folio is very good ? any suggestons
    I contacted HDFC but they only have funds from HDFC ,
    Do let me know whom to contact to invest on above funds?

  49. Hi Anil.
    Thanks for quick reply. You said my port folio is fine. but can I expect your comment as very good or excellent , so what should I add / remove to get such rate from you ? so that I will more confident.
    Contacted fund houses ex, HDFC, They said I can choose any fund from HDFC but not other funds , CAMS is that correct ?
    how about moneycontrol ?
    Can I buy and manage through online ?

    • Hi Eswar
      Investing is a dynamic process. You can not sit on your portfolio after selecting the funds. The performance of the funds has to be constantly monitored. It is possible that the performance of even the best fund can falter. Hence it is not proper to use the words like excellent.
      CAMS are registrars and transfer agents for fund houses and you can contact them for all the fund houses handled by them.

      • Hi Anil,
        Thank you for suggestions, How frequntly I should monitor 6 / 12 months once or yearly , then switch over to other funds if the performancy is not good ?
        incase if it not performing well then what to do for all ready invested. can we withdraw them or let it and choose otherfunds?
        I heared most of the funds exit load is 2%, CAMS will charge for the service?
        can i buy or sell online ?

  50. Hi Eswar
    Monitoring should be done atleast once a year. However one should not be in a hurry to exit the funds. The performance of the funds should be checked against the benchmark index of the fund and category average/peers. You must think of exiting a fund only when for a considerable period of the time the fund performs poorly consistently. Exiting should not be based on short term poor performance.
    Normally redemption is done only when the money is badly needed or a better option of investment is available.
    Exit load is normally applicable only when you decide to exit before completing one year.
    CAMS are registrars and transfer agents of the fund houses, They don’t charge anything for their services to the investors.

  51. Hi Mr. Anil

    I have doubt in my mind, if i want to switch one of my fund i.e icici pru infrastructure to icici pru bluechip equity.
    1. Should i need to sell all units of my existing fund and buy units of new fund and continue SIP in new fund ?
    2. Should i need to continue further SIP in new fund only. units of old fund remain in old fund ?

    Or what if i want to change fund house ?

    • Hi Kawardeep Singh
      If you give request to ICICI Prudential fund house to switch from your existing investment in ICICI Prudential Infrastructure fund to ICICI Prudential Focused Bluechip Equity then the amount already invested in the old scheme will be switched to the new scheme but your SIP in the old scheme will continue.If you don’t want to continue in the old scheme then you have to tell them to stop your SIP in the old scheme.
      For starting your SIP in the new scheme you have to give another application. You can retain your folio of old investment if you want.

    • Hi Kawardeep Singh
      If you want to change the fund house then it will be entirely a new investment.

    • Hi Kawardeep Singh
      While making a switch it is not necessary to switch all units of the old scheme to the new scheme. Partial switching based on the number of units or the amount is also permissible.

      • Sir what is ur suggestion to switch old units in to new units on lump sum then continue through SIP. As per my thinking value of money is same so u should not need to worry before switching.

        • Hi Kawardeep Singh
          It is difficult to predict the future performance of both funds.Right now the performance of ICICI Prudential Bluechip Equity is better than that of ICICI Prudential Infrastructure fund.You have to take the call for switching now.

  52. Hi Anil,

    I’m 31 years old with moderate risk appetite. I had SIPs in
    1. DSP top 100
    2. HDFC top 200
    3. Reliance RSF (G) &
    4. Reliance Growth for Rs. 2500 each for 12 months from May 2010 to April 2011.

    I stopped the SIPs for a while as I needed money for the downpayment of our new house. I would like to resume contributing 10k every month towards MFs for another 10 years for my son’s education.

    As you know, my MF investments are in Red now. Please suggest whether I can continue with the same fund selection. I’m not very impressed with both of the reliance funds as their CRISIL rating is poor for sometime now. I don’t want any mid & small cap fund. Perhaps, I need a balanced fund too in my portfolio? Please advise. Many thanks in advance.

    • Hi Lakshmi
      I am glad that you are very clear about your thinking.Since your risk appetite is moderate it will be a good idea to go for only balanced funds.You can consider investing in HDFC Balanced Fund and Birla Sunlife 95.
      If you want to have three funds then you can also consider ICICI Prudential Focused Bluechip Equity.
      Since you are investing for ten years it is important to keep tracking your funds atleast once a year.

      • Hi Anil,

        Thanks for your prompt reply. I’m under the impression that DSP top 100 & HDFC top 200 are of the moderate risk category as they are in the large & multicap categories respectively. Is that correct?

        Please clarify whether you suggest HDFC Balanced Fund, Birla Sunlife 95 &
        ICICI Prudential Focused Bluechip Equity in addition to the DSP top 100 & HDFC top 200 or just go with the 3 funds that you have suggested.

        Thanks, again.

        • Hi Lakshmi
          As you have already stopped your SIPs in the funds mentioned by you I am suggesting that you should not resume your SIPs in these funds again and instead go for a new investment portfolio. However you should not redeem your investments in these fund unless you are badly in need of money as this is not the most appropriate time for redemption.
          As far as risk is concerned some amount of risk is there in all types of mutual funds.Balanced funds are less risky as they are not pure equity funds due to the presence of debt element in them.Next in the risk are pure large cap funds.Then come large and midcap funds.
          While building your mutual fund portfolio you should adopt core and satellite approach.80% of your portfolio should have core funds such as balanced funds,pure large cap funds and large & midcap funds. Core portion of your portfolio provides stability to your portfolio as it consists of funds which have proven long term track record and carry comparatively less amount of risk.
          Satellite portion of your portfolio can have multicap funds, mid & smallcap funds, gold funds, sector funds and thematic funds. Satellite portion which is only 20% of your portfolio consists of risky funds which have a potential for higher returns.
          Since you have a moderate risk appetite I have not suggested any satellite funds.

  53. hi,

    really its a good source of information and really help us in planning our future investment plans, pertaning to present market sceneario.


  54. Hi Anil, I am 44 years & I have been investing on following funds-
    UTI Oppoturities Fund (G) – Rs 1500
    HDFC Top 200 – Rs.1000
    HDFC Equity (G) – Rs.1000
    IDFC Premier Equity – A (G) – Rs.2000
    HDFC Prudence (G) – Rs.1500
    Reliance Pharma (G)-Rs.1000
    Reliance Gold Saving fund (G)-Rs.1000
    Could you please suggest above my port folio ? any suggestons.
    Should I do any changes and start any others fund category?
    Please advice!

    • Hi bku
      Your fund selection is very good.However your portfolio has not been properly diversified across fund houses.You have used three funds from HDFC fund house.When you select three funds from a fund house chances are that the funds are managed by the same fund manager.Firstly it reduces the diversification as one fund manager tends to use many common stocks for all the funds.Secondly if the fund manager falters in his selection of stocks it adversely affects the performance of all funds managed by him.Hence using three funds of the same fund house deprives you from the benefit of diversification and increases your risk.
      While building your portfolio you should adopt core and satellite approach.The core will consist of large cap and large and midcap funds.The core will provide stability to your portfolio.Normally 70 to 80% of your investment in diversified equity funds should be in core.You have invested in two large and midcap funds but there is no investment in any pure large cap fund.I would suggest that you include one pure large cap fund like ICICI Prudential Focused Bluechip Equity in your portfolio.
      Your portfolio has a satellite tilt which makes it risky. By investing in pure large cap fund you can restore the balance of your portfolio.

  55. I am want to invest in Mutual fund around 30k for 20 yrs for my kids.
    So, i am new to this. can you please recommend the MF that i can invest.

    • Hi Anil
      You can consider investing in the following funds.
      1 ICICI Prudential Focused Bluechip Equity
      2 UTI Opportunities fund
      3HDFC Equity Fund
      4 IDFC Premier Equity
      Invest around 75 to 80% in no 1 and no 2 and the remaining in no 3 and no 4.
      Review the performance of these funds at least once a year.

  56. Hello Hemant Beniwal sir

    I’m totally new to mutual funds can you please suggest me SIP’s for long term of 20 years or more

  57. Hi Hemant,

    I’ve two SIP of Rs. 2000 – ICICI Prudential Regular Gold Savings Fund (G) & ICICI Prudential Focused Bluechip Equity Fund (G). Planiing to start another five SIP 0f Rs. 2000 each – Quantum Long-Term Equity Fund (G) / ING Dividend Yield Fund (G) , HDFC Top 200 Fund (G) / HDFC Mid-Cap Opportunities Fund (G), DSP BlackRock Top 100 Equity Fund – Regular Plan (G), IDFC Premier Equity Fund – Plan A (G) and Reliance Monthly Income Plan (G).

    Please guide & help me to select the two from first two options.



    • Hi Nirupam
      You seem to be investing in the reverse order. Normally one should look at investing in gold after having a portfolio of diversified equity funds. Exposure to gold should not be more than 10% of that to equity funds.
      For proper diversification across fund houses only one fund should be selected from a fund house.
      Reliance monthly income plan does not fit in the portfolio.
      What is your objective of these investments?
      What is the time frame of investments?

      • thanks Anil !

        I’m 32 years old, this investment is for my retirement plan & time frame is 20 years.

        I’ve started both the SIP (ICICI Fund House) from Oct.’11.

        Please suggest now.

        • Hi Nirupam
          Please adopt core and satellite approach. Large cap and large & midcap funds will form core. Mid & small cap, multicap, gold fund will form satellite. Invest around 75% in core and balance in satellite.
          You can add these funds to your portfolio :
          1 DSP Blackrock top 100
          2 HDFC Top 200
          3 Quantum long term equity
          4 IDFC Premier Equity
          These funds are enough.No need for Reliance MIP.
          Invest Rs 2000/- each in 3 & 4 and divide the remaining between 1 & 2.

          • Thanks Anil,

            one more query i have. I’m planning to invest Rs. 50k onetime in Kotak PSU Bank ETF for 1 year.

            Please guide whether my decision is right or any other fund which you think better .

  58. Hi Gopal
    Before starting investments it is important to know about you.
    What is your age?
    What is your income?
    What is your marital status?
    How many persons are financially dependent on you?
    How much can you save per month?
    How much can you invest per month?
    What is your risk profile?
    What is the objective of your investment?
    What is your time frame for investment?

  59. I have started investing in SIP since last present I have sip’s in
    UTI div yield 1000
    ICICI bluechip 2000
    BSL Dynamic bond 2000
    HDFC Prudence 2000
    Kindly suggest a suitable gold fund whether Reliance or SBI
    are the above good choices to give me a good return of say appx 12%.
    how much more should i invest so that after 10 to 12 yrs I have built a corpus of 20 to 25 lakhs

  60. Hi Hemant,
    You are doing a great job by educating common people of financial investments. Hats off!!
    I have a query… My husband has been investing Rs.40,000 every year in a ULIP policy, ICICI Lifestage RP. He has paid for three and a half years, total Rs.1,40,000. And the returns are in red. Should he keep paying and wait for 5 yrs to complete, for good returns…. or should he stop paying and take out the money now? Please suggest.
    Thanks in advance 🙂

  61. Sir,
    Right now, I am investing in following funds. started investment last month.
    Icici bluechip equity fund(G)- 2500/m
    UTI opportunities(G)-3000/m
    HDFC Equity fund(G)-2500/m
    IDFC premier Equity Plan A(G)- 2500/m
    Also, I have DIYSIP in UTI Gold ETF-around 2500/m

    Is my portfolio balanced?I dont think so. Kindly advise

    —My wife also wish to build MF portfolio for 10-15 years horizon. and can invest 6000 per month. Kindly suggest, should she invest in funds/fund houses different from mine? How to choose the funds for her?
    Many Thanks.

    • Hi Inder
      Your fund selection is fine but your portfolio is risky as you are investing less in core funds and more in satellite funds.You should be investing around 75% amount in funds no 1&2. Your wife also can have similar portfolio but she should not be investing in gold.

        • Hi Inder
          Since your wife has not started investing so far she should invest only in balanced funds or large cap funds.You can also think of investing in HDFC Balanced Fund instead of HDFC Equity Fund which is riskier. This way your combined portfolio will become balanced and less riskier.

  62. Dear Hemant,
    I am a regular reader of financial articles.Some of your articles are praiseworthy.But what’s about HDFC MIP,TOP200,PRUDENCE fund?For the last two years they are giving either negligible or negative return.FRANKLIN BLUECHIP also falls in the same category.Can you tell me why one should invest their hard earned money in M.FS?The word “LONG-TERM” Is also farce.I can show you several funds are giving negative return for say aged or retired people should invest in MIPs.But is their any future?

    • Hi dibyendu
      Are you not aware of the disclaimer that all mutual fund investments are subject to market risks and past performance of the funds does not imply that in future also you will get that type of returns.If we see the performance of markets for the past five years, the returns from most mutual funds are very poor.The fate of all mutual funds is linked with the fate of the market.If the market gives negative returns you can not expect mutual funds to deliver positive returns.Those people who have no risk appetite should not be investing in mutual funds.

  63. hello Anil and Hemant,
    I am deepanshu age 23.
    Your article and replies helped me lot to understand about investing in MF. As m too a novice to MF and planed to invest in them for my future goal. I am planing to invest Rs8000/ month through SIP.So want your advice on my investment plan:
    large cap
    DSPBR Top 100 Eqt Reg-G-2000/month

    large and mid cap
    HDFC Top 200-G-2000/month

    equity multi cap
    Tata Equity PE-G-2000/month

    mid and small cap
    ICICI Pru Discovery Inst I-G-2000/month

    please let me know if this plan is ok or i need to do changes in it. My plan is to continue these fund for 7years atleast. So please enlighten me.

    • Hi Deepanshu
      Your fund selection is very good.You have selected all funds with Value Research five star rating. However the ICICI Prudential Discovery fund mentioned by you is meant for institutional investors. You will have to invest in the fund scheme meant for retail investors which carries a four star rating.
      Normally allocation of around 75% in core funds and 25% in satellite funds is suggested.In your case it is 50% in each.This gives your portfolio a satellite tilt and makes it riskier.Instead of investing Rs 2000/- per month in each fund you can consider increasing your investment in Large Cap and Large & Midcap funds to Rs 3000/- each and reducing to Rs 1000/- each for Multicap and Mid & Smallcap funds.

      • thanks Anil
        So now i’ll go for ICICI Pru Discovery-G and TATA Equity PE-G 1000/m ecah and increase the amount in other two. Hey can you tell something about discounting rate??

  64. Hello Hemant,

    I am very new to SIP and mutual fund.
    My age is 27 and now i am planning to take two SIP’s 1000Rs each for long term(10 years).
    1.Reliance Equity Opportunities Fund
    2.Franklin India Bluechip.

    Please suggest.

    • Hi Aditya
      The funds selected by you are good.However, since you are a first time investor and the investment amount is small, I would suggest you to start with a balanced fund like HDFC Balanced Fund.After some time when you have more money to invest you can build a portfolio of diversified equity mutual funds following core and satellite approach.

  65. Hi,
    I am 22 years old, earning since 7 months and looking to invest around 3 – 5k per month. No great objectives as of now. I am totally new to this. Can you suggest some SIP s to start with. I met a financial consultant yesterday. They suggested :
    ICICI Pru Discovery
    HDFC Top 200
    Reliance Gold Saving Fund
    UTI Divided Yielded fund

    Can you please review/suggest some SIPs.

    • Hi Abhi
      Before starting any investment you must be clear about the objective and time frame of the investment.

  66. So for a new investor in MF like me should select top fund in each category and start investing……I need to invest around 10000rs pm in MF….

  67. My mother has land purchased in 1987. I & my brother wish to sell off due to financial crisis. Do we have to pay capital gain tax on entire selling amount or Capital tax can be paid after repayments to house loan & Education loan (children account). Can capital gain be avoided if mother gifts to both sons?

    • Dear Rao,
      Will suggest you to consult some CA.
      By question it looks that home loan is not on the property that you would like to sell – so you have to first make provisions for capital gain & then you can repay the loans.

  68. Hi Hemant,

    Thank you very much for your great effort.
    I am 23 yrs old Engineering graduate.

    pls give your valuable comments on HDFC Crest.
    I am investing in it from last year(highest NAV of 7 years).

    I am also investing in SIP like HDFC top 200,IDFC pr. Equty , DSPBR ssmall & Micro,BSL front line EQUITY,UTI DIV yld ,RIL gold savings.(time horizon 3-5 yrs)

    AND some lump some in GS Gold ETF, Bank Bees,DSPBR top 100,HDFC equity.

    What should I do ?

    Eagerly waiting for your reply.

    Best regards

    • Hi Saikat
      Your investments lack any direction. It seems that you have just made some investments without having any objective.Time horizon of 3-5 years is too short for investments in diversified equity funds.You should follow this approach :
      Define your goals
      Quantify the goals
      Fix time frames for goals
      Build portfolios for your goals
      Invest to meet your goals.

  69. Hi Anil,

    I m 23 years old and i have started investing in MF just few days ago. after few researches i opted for
    HDFC TOP 200 and HDFC midcap Oppurtunity.

    can u please tell me if my selection is correct or not and can u advise me to diversify correctly with my portfolio.

  70. Hi Javed
    Your fund selection is very good.However in order to spread your risk it will be better to diversify across the categories of funds as well as fund houses. In order to advise you correctly I must have the following information:
    The objective of your investment
    Time frame of your investment
    The amount to be invested per month.
    Your risk appetite.

  71. Hello Anil,

    Thanks for ya reply.

    I have a medium risk appetite.The main objective of my investment is to buy a house.
    I ant to make along term investment.
    The amount currently i m looking to invest is Rs. 3000 per month which i will slowly increase in coming days.

    • Hi Javed
      You can consider investing in a balanced fund like HDFC Balanced Fund if your time frame is more than five years.

  72. Hi Hemant/Anil

    I want to invest for short term in MF’s for 5 Years and 3 years about 5000 Rs/Month , can you please advice me the best performing funds which can give me a higher returns at moderate risk.


    • Hi Anwar
      Investment in mutual funds is not done for short term of three years. For five year you can consider investing in some balanced fund like HDFC Balanced Fund.

  73. Hi Hemant/Anil

    In the small and midcap funds category I have been investing in SBI Magnum Global Fund Rupees 1000 per month since 2009 and have got fairly decent returns till date. Should I stay invested in this fund or switch to some other fund in the same category?


    • Hi Subhasish
      You should consider exiting a fund only if its performance falters. If a fund gives decent returns then there is no case for exiting that.

  74. Hi Hemant
    I am new to investing. I am reading your articles for last 4 months and now I am planning to start investments in mutual funds. I am 24 year old, unmarried, living with parents. My monthly salary is around 25000 and savings is around 15000. I am planning to invest Rs 10000 per month in different mutual funds through SIP. the funds I have selected are-
    Franklin India Bluechip Rs. 2000 pm
    ICICI pru focused bluechip equity Rs 2000 pm
    HDFC Top 200 Rs 3000pm
    IDFC premier equity plan A Rs 2000pm
    DSPBR equity Rs 2000 pm
    I have an investment horizon of 20-25 year and monthly investment amount likely to increase after 3-4 years. In an adition i have a PPF account maintained by my father & it will mature in 2016.
    I would request you to kindly review my portfolio and give your valuable opinion.

    • Hi Sayan Kundu
      All the funds selected by you are highly rated.You have also diversified across fund categories and fund houses. You can start your SIPs in these funds.Keep tracking the performance of your funds after starting your investments.

  75. Dear Mr. Hemant / Mr. Anil,

    I am investing Rs.27,000/- in SIP in the below mentioned mutual funds every month. Please suggest for addition / deletion, if any.
    Thanks in advance.

    HDFC Top 200 Fund (G) 5,000
    HDFC Equity Fund (G) 2,000
    Reliance Equity Oppor – RP (G) 2,000
    Reliance RSF – Equity (G) 2,000
    ICICI Pru Discovery Fund (G) 2,000
    ICICI Pru Focused Bluechip Eqty (G) 6,000
    IDFC Premier Equity – A (G) 5,000
    UTI Master Value Fund (G) 1,000
    DSP-BR Small & Mid Cap -RP (G) 2,000
    TOTAL 27,000
    best regards,

    • Hi Murali
      All funds selected by you are good but you have too many funds in your portfolio. Consolidate and retain a maximum of five funds. There is no point in having too many similar funds.This is only duplication not diversification. Moreover you have not diversified across fund houses as you are using more than one fund from three fund houses. Retain only one fund from each fund house.

      • Dear Anilji,

        Thanks a lot for your kind reply.

        Can you please help me to list best 5 funds.

        Simply help me to list best 5 funds for long term investment of atleast 15 years time span. Also keep in mind diversification of fund houses in line with your advice and suggest any new fund if required. I’ll retain best 5 and close rest.

        I am curious to know while selecting SIP dates, which date is most preferred, I mean 1st /2nd/3rd/4th week or all are same dates having no impact.

        best regards,

        • Hi Murali
          SIP dates are not important.You can select the dates as per your convenience.You can consider retaining these funds:
          ICICI Prudential Focused Bluechip Equity.
          HDFC Top 200
          Reliance Equity Opportunities
          IDFC Premier Equity.
          UTI Master Value
          Keep tracking the performance of your funds.

            • Wanted to add my 2 cents. If you have 5 SIP’s in a month, it is advisable to space out your SIP installment dates throught the whole month rather than a single day or the first week of the month. Most of the funds provide 4 to 6 days in a month for SIP and it would be better if you can choose dates such that your investments are spread out.

              No scientific reason. But this will ensure that you will not end up catching some highs at the beginning.

              Do correct me if I am wrong.

              • Hi Robin
                In theory what you say may be correct but what has been seen in practice that it is not possible to time the market and time in the market has a bigger role to play. In the long run SIP dates do not matter.

            • Dear Anilji,

              Now I am in a dilemma and hope only you can give me suitable advice, hence please help.

              Actually I am investing 27K in mutual fund inline with your advice, but now I have booked a flat for which an amount of 26,00,000/- Home Loan has been sanctioned. EMI may be around 26K.

              So please advice me whether I should stop all Mutual Fund investments and deposit additional amount in Home Loan account apart from EMI to reduce the interest or should I continue to invest in Mutual Funds apart from EMI for Home Loan ?

              Please note I can manage to get additional 25-30K apart from home loan EMI.

              Thank in advance.

              best regards,

  76. Dear Mr. Hemant / Mr. Anil,

    I am 35 years old doing private job and a long-term investor, having planned to invest for at least 15 years and started SIP in July 2010. My aim to create wealth in long run thru SIP. I invest 70,000/- in PPF every year, apart from 60,000/- in PPF and has some LIC policies.

    I am investing Rs.27,000/- in SIP in the below mentioned mutual funds every month. Please suggest for modification / addition / deletion, if any.

    Plz let me know how much I can get after 15 years with this much SIP (approx.). Also let me know any other best alternate investment tools.

    Please guide me suitably.

    Thanks in advance.

    HDFC Top 200 Fund (G) 5,000
    HDFC Equity Fund (G) 2,000
    Reliance Equity Oppor – RP (G) 2,000
    Reliance RSF – Equity (G) 2,000
    ICICI Pru Discovery Fund (G) 2,000
    ICICI Pru Focused Bluechip Eqty (G) 6,000
    IDFC Premier Equity – A (G) 5,000
    UTI Master Value Fund (G) 1,000
    DSP-BR Small & Mid Cap -RP (G) 2,000

    TOTAL 27,000

    best regards,

  77. Dear Mr. Kapila, Greetings!
    Read over your blog and entire thread with great interest. Most comprehensive and quite enlightening. I live in the US and plan to return to India to work on some “not for profit-charity” projects 5-6 years from now. Would be living 50-60% in India and remainder in US. We have about Rs 20,000/month to put away in MF/other investments so as to generate returns for spending on charity. What would you suggest? Thanks and appreciate your response.
    Pulak Das

    • Hi Pulak Das
      What is your status in the US? Are you US citizen or NRI? Do you have some bank account in India? As per my understanding all US citizens have to give information regarding their bank accounts as well as their investments in India to the US government and there are some tax implications.You must consider all these things before considering some investment in India.

      • Mr. Kapila,
        Thanks for your prompt response. Yes, we are US citizens. I am also a government pensioner and the investments we plan are from that pension fund. Since the investments are from an INR account would there still be need for formal government approval? Thanks again and keep up the good work. Best.
        Pulak Das

        • Hi Mr Pulak,
          I just saw your interaction with Anil – would like to add my 2 cents. There are n number of variables US PIO/OCI/NRI need to consider before & after investment in India so my suggestion is you should consult some international tax consultant.

  78. Hello Mr. ANIL/All Experts,

    I have invested Rs. 13,000/ month in SIP. Please find the below fund details and advice me know whether these are good or i need to change.

    1. DSP-BR Micro Cap Fund – RP (G) –> 1000/-
    2. DSP-BR Small & Mid Cap -RP (G) –> 1000/-
    3. HDFC Equity Fund (G) –> 1000/-
    4. HDFC MidCap Opportunities (G) –> 5000/-
    5. HDFC Prudence Fund (G) –> 1000/-
    6. HDFC Top 200 Fund (G) –> 2000/-
    7. Reliance Banking Fund (G) –> 1000/-
    8. Reliance RSF – Equity (G) –> 1000/-

    Kind Regards,
    S. Karim

    • Hi S Karim
      All the funds selected by you are good.However, you have selected too many funds.Moreover, your selection lacks proper diversification as you have selected eight funds only from three fund houses.You should not be investing in more than four funds and there should be only one fund from one fund house.

  79. Hi Anil.
    I need a suggestion……I have started my SIP in good large cap Funds from last year and investing 20k per month.
    Right now i need 1 lac rupees to invest in a plot where appreciation is sure shot in coming five years (I can double my money).
    To pay 1 lac shall I take a personal loan at 14% on my credit card or stop my SIP for 5 months ?

    • Hi Ankur
      We must define and plan for all our short, medium and long term goals properly. Investment is diversified equity mutual funds is done to meet our long term goals. Our savings must be allocated among our different goals in the most efficient manner based on the priority. The savings which are committed to equity mutual funds must be those which we will not need for atleast next five years. Such a situation should never arise that you have to take high interest personal loan on your credit card to meet your short term goal.

  80. Dear Anil Sir,

    I belongs to a middle class family and working very hard to save money for future needs and below is my mutual fund SIP details, please comment.

    HDFC Top 200 Fund (G) 5000
    UTI Opportunities Fund (G) 2000
    ICICI Pru Focused Bluechip Eqty (G) 5000
    DSP-BR Top 100 Equity – RP (G) 2000
    IDFC Premier Equity – A (G) 5000
    Reliance Equity Oppor – RP (G) 2000
    Franklin India Bluechip (G) 2000
    Fidelity Equity Fund (G) 2000

    Thanks for your guidance to all needy people.


    • Hi Ashok
      Your fund selection is perfect. All funds are highly rated. Your could have manged even with less number of funds. Keep tracking the performance of all funds in your portfolio.

        • Hi Ashok
          Since you are already investing in good funds I don’t want to do any tinkering with your portfolio.You can continue investing in these funds. Later on if you find the performance of some fund faltering you can consider exiting that fund.

  81. I need to invest in gold but don’t have DMAT account. Is there any fund which is equivalent to gold ETF where I cna invest….I heard abt reliance godl fund….Please suggest

    • Hi Anand
      Yes, you can consider investing in Reliance Gold Savings Fund.All Gold Saving Funds invest in their Gold ETFs and the return depends on the price of gold and is more or less similar.You can consider any fund which has lower charges.You can also look at Quantum Gold Savings Fund.
      Normally investment in gold is considered only when you already have a portfolio of diversified equity funds.Exposure to gold should not be more than 10% of the portfolio.

  82. I am 33 years old and have SIP in the Following Funds. Please suggest me if those are good or i need to change the portfolio.
    1. SBI PSU FUND : – 1000 per month
    2. SBI Gold Fund – 1000 per month
    3. SBI Emerging business Fund – 1000 per month
    4. SBI Magnum Equity -1000 per month
    5. HDFC Top 200 – 2000 per month
    6. HDFC Prudence – 1000 per month
    7. SBI Magnum contra – 1000 per month
    8. ICICI Pru Focused Bluechip Eqty 2000 per month
    9. DSP-BR Top 100 Equity 1000 per month

    • Hi Chakravarthy
      You are investing in too many funds and your portfolio lacks diversification across fund houses as you have invested in five funds of SBI Mutual fund house which is very risky. Keep only one fund of SBI Mutual Fund.You can retain funds of other fund houses which are good.

  83. I want to make Investment in Mutual Fund through SIP Rs 1000 monthly for long term 10 yrs
    please suggest me best fund,i had decided to go for HDFC TOP 200 Growth it ok

    • Hi Deviprasad Upadhyay
      Since you are first time investor you can consider investing in some balanced fund like HDFC Balanced/HDFC Prudence.

  84. I am 35 yrs old . I want to invest 10,000 per mnth for 5-15 yrs in mutual should i continue ,becoz i am new to this . plz guide

  85. Hi Hemant/Anil,

    For long term investments I heard that 40% [or majority of your portfolio] should be invested in large cap funds. However the trend in the above chart depicts that multicap and mid/smallcap funds have been doing relatively well for the last 10 years.
    Then why not invest more in multicap, mid and small funds ? Please advice


    • Hi Sapna
      The objective of investment, time frame and risk appetite are the important considerations in investing. Moreover, to spread your risk investment in different asset classes like debt, equity and gold is desirable. Diversification among different categories as well as fund houses is also required for the same reason.
      While building a portfolio core and satellite approach is to be followed. Core can have equity oriented hybrid funds, large cap funds and large and midcap funds.
      Satellite will have mid and smallcap funds, multicap funds, sector funds, thematic funds, gold funds etc.
      Funds in core will be comparatively less risky with established track record over a long period of time in all market cycles. Value type funds will find place in core.Core provides stability to your portfolio with predictable returns in the long run.
      Satellite funds follow growth philosophy.These funds are riskier but have potential for high returns. Core can be compared to the main coarse of the meal and satellite to pickles and desserts which make the meal tastier. Too much of satellite can upset your stomach. If you have iron stomach and higher risk appetite you can eat as much of pickles and desserts as you want.

  86. Dear Sir
    My name is Manoj kundu age 41 years is staying at Noida. Dependent on me is my wife & two daughters. Daughters age are 9 years & 2 years respectively
    I am investing below mentioned fund from last 8 month for daughter marraige (15 years ) & retirement (18 years)
    4.HDFC TOP 200 FUND – GROWTH PLAN 5000
    TOTAL 17000

    Do I continue or change my portfolio.Please guide me
    With Regards,
    Manoj kundu

    • Hi Manoj
      Your fund selection is good. You can continue your investment in these funds. Keep on tracking the performance of your funds.

  87. Hi Hemant/Anil,

    1. I have started SIP investment in mutual fund and stock .Herewith furnished my portfolio as follows and i request you to evaluate my investment and ur breif advise*…(My age 34 years old)*
    a. Hdfc Tax Saver -ELSS
    b. Hdfc Top 200 Growth -Large & midcap
    c. Reliance Gold Savings -Gold
    d. Reliance Equity Opportunities – Small & midcap
    e. ICICI Focussed Bluechip Equity Growth -Largecap
    f. Motilal Most M50 -ETF
    g .Yes Bank -sector bank -This also in sip invest for next three years.

    The total amount of investment of above portfolio is Rs.10000/ month
    Awaitnig for your fabourable reply…

    Thanks & Rgs,
    Deva Rangasamy

    • Hi Devarangasamy
      Your fund selection is OK. However, you could have selected funds from other fund houses instead of having two funds each from two fund houses for diversification across fund houses.

        • Hi Devarangasamy
          You have not given individual allocation among different schemes. Normally 70% of your allocation should be in largecap and large & midcap funds like ICICI Prudential Focused Bluechip Equity and HDFC Top 200 and the balance should be in other funds like multicap funds, mid & smallcap funds, sector funds, thematic funds, gold funds etc. Since you have invested in too many funds it appears that your allocation in core funds is weak. Moreover you have not diversified across fund houses as you are using two funds each from two fund houses which makes your portfolio risky.

          • Ji,
            Please find below the allocation of amount in each fund..Kindly advise..
            I urgently required your comments…

            a.Hdfc Tax Saver -ELSS -Rs.2000/month
            b. Hdfc Top 200 Growth -Large & midcap -Rs.1000/month
            c. Reliance Gold Savings -Gold -Rs.1000/month
            d. Reliance Equity Opportunities – Small & midcap -Rs.1000/month
            e. ICICI Focussed Bluechip Equity Growth -Largecap -Rs.1000/month
            f. Motilal Most M50 -ETF -Rs.2000/month
            g .Yes Bank -sector bank -Rs.2000/ month


              • Hi Devarangasamy
                Your investment in ICICI Prudential Focused Bluechip Equity and
                and HDFC Top 200 which form the core of your portfolio is only Rs2000/-.You should increase your allocation in these funds by exiting from f & g.

  88. Anil Sir,

    I have a query.

    For one person who is earning 50,000/- per month from a secured job, and monthly expediture is around 15,000/-, than how to distribute this 35,000/- in savings, for future needs. I have PPF and VPF investments apart from some investment in LIC. So my question is how I’ll get better return & in which instruments by investing 35K per month ?

    If the answer is highly rated Mutual Funds, than how to distribute in % amongst Large Cap, Large & Cap Midcap, Small & Mid Cap.

    Please advice.

    • Hi Ashok
      The basic rule of investing is not to put all your eggs in one basket. So proper asset allocation and diversification to spread your risk is important. You can have a typical asset allocation like 60% in equity, 30% in debt and 10% in gold. Moreover, you have to consider your goals, time frame as well as your risk appetite while investing. Types of investments for different time frames are different. Build different investment portfolios for different goals. Track your investments and do rebalancing as and when needed.

  89. Hi, i have below three queries:
    1)am planning to invest in the Franklin India Tax Shield ( G) ELSS scheme.
    Please can you suggest if its a good scheme/ should i look out for any other scheme in this category.
    2) Also can you suggest me regarding the best commodity fund for SIP
    3) As an investment of around 1000-2000pm SIP can you suggest me any fund irrespective of the category ( 5-10 yrs).
    Currently i just have one ULIP Birla Sunlife fund of Dream Plan-Life Cvg-Opt 100% -Term 20 (invested in 2009).
    Many Thanks
    Sivaram Iyer

    • Hi Sivaram
      Franklin India Tax Shield is a four star rated scheme and can be considered for investment. A gold saving fund can be considered provided you already have a portfolio of diversified equity funds.For a time horizon of 5-10 years a balanced fund like HDFC Balanced/HDFC Prudence can be considered.
      Investment and insurance serve different purpose.ULIP which combines both is not a good idea.

      • Hi Anil,

        Many Thanks for your reply. Currently am trading in Stock Market ( FnO segment – Currency and Stocks). So wanted to check about the better commodity funds available in the market where i can invest around 2000pm.
        Is there any fund which covers segments of Commodities eg: precious metals etc. Then it will be sort of diversification i guess.
        Regarding the ULIP , i had invested 3years back, now when the lock-in period will be over, i will move out of it and invest in term plans and equity funds.

        Many Thanks
        Sivaram Iyer

        • Hello Hemant,
          It appears from the preceding that a person is going to move out of ULIP after the lock-in period is over and move out of it. In which case one would be playing into the hands of the company. The investor or the insured will have to pay the bulk of the charges upfront.. maybe in the first year itself and in subsequent years the charges levied is much less. And in case the policy is fully paid-up then there is no need to pay the subsequent installments except as a investment vehicle. And in case the fund in question is doing well then it definitely makes sense to keep it as it is and be assured of (god forbid) the insurance cover for which the payments have already been done!! In case the policy is not fully paid up then thats a different issue; and so basically one has to be check this aspect first before taking any decision on the termination of the policy!
          Your esteemed views please.

        • Hi Sivaram Iyer
          Some fund houses like Birla Sunlife have Commodity Funds.You can check Fact Sheets of fund houses to get the exact information.

  90. Dear Hemant/Anil,

    I am 44 years old and started investing in the SIP since last 4 years. I am planning to continue my investment for 15 years.
    Kindly check and let me know any modification is needed. Thanks in advance.

    HDFC Top 200 Fund Growth (Rs 4000)
    ICICI Prudential Dynamic plan growth (Rs 2000)
    UTI Opportunities fund- growth plan (Rs 4000)
    DSP Black rock Top 100 equity fund growth -regular (Rs 3000)
    BSL front line equiet fund (Rs 5000)
    HDFC Prudence fund (Rs 4500)
    Reliance gold savings fund (Rs.2500)

    Total: Rs.25000 per month.

    • Hi GN
      Your fund selection is good.You can continue your SIPs in these funds. However, keep on tracking the performance of the funds regularly.

      • Dear Anil,

        Thanks for your kind advice. Now I am more confident and I will contiue SIPs in these funds. I am planning add another 5,000/- SIP per month, is it advisable and kindly suggest me suitable fund. Thanks in advance.

  91. HI Hemant,
    I am investing Rs 10,000 monthly through SIP as follows and plan to continue my investment for next 5 years. Kindly check & advice

    icici Focussed Bluechip Equity Growth -Rs.1000
    Hdfc Top 200 Growth -Rs.1000
    Reliance Gold Savings -Rs.1000
    Hdfc Tax Saver -Rs.2000
    Motilal Most M50 -Rs.2000
    Reliance Equity Opportunities – Rs.1000
    UTI opportunities -Rs.2000

  92. Hello Hemant,
    This is an excellent article indeed and the various comments are also of immense help. There are two points that I was wondering if it could be taken on either here or in some other article:
    The first is what should be an ideal mix of funds that one should be investing in, ie, lets take any figure as a monthly investment figure and we are going to be only doing SIPs, so what percentage should be in each of the categories.
    The next point is regarding shifting of the equity mfs to debt at some stage so that the gains are protected. Could this be dealt with please.

    • Hi Praveen
      Asset allocation, diversification and rebalancing are the main issues involved in spreading the risk and protecting the gains. Your risk appetite, investment objectives and investment horizon are the key points to be considered. Separate investment portfolios must be built for short term, medium term and long term goals.Short term investments will be only in debt, medium term in a mixture of debt and equity with less exposure to equity and long term investments will have equity as the major component and debt as the minor component. Rebalancing involves periodic booking of profits to shift the gains from one asset class to the other. As you approach your goals equity gains have to be moved to debt in a systematic manner over a period of time.

    • Hi Pravin
      In all investments you have to balance risk with reward and consider all options.If you don’t want to take any risk then savings A/C as well as short term fixed deposits are good options.If you are not averse to risk taking then you can consider short term debt fund.In debt invesments interest rates are main considerations.If the amount of investment is large then taxation may also be a consideration.

  93. I need to design my investment portfolio for long term keeping 10-15 years in mind. To start with, I want to invest lump-sum of 2 Lacs, and 20,000 per month there after.

    I have selected following funds under different caps. I need your suggestion, what more fund can I add, or remove any fund from the existing folio.

    Equity: Large Cap
    ICICI Prudential Focused Bluechip Equity Retail
    DSPBR Top 100 Equity Reg

    Equity: Large & Mid Cap
    HDFC Top 200
    UTI – Dividend Yield Fund

    Equity: Mid & Small Cap
    Birla Sun Life Dividend Yield Plus
    HDFC MidCap Opportunities

    HDFC Prudence fund


    Let me know how would break 2 Lacs and invest in different funds, also what would be breakup of monthly sip.

    • Hi Neeraj
      Your fund selection is very good.You have not included any multicap fund. So you can consider a fund like Quantum Long Term Equity.There is no need to select two funds from each category, one will do.Moreover there should not be too many funds from one fund house.So select only one fund from HDFC Fund house.Balanced fund, large cap fund and large and midcap fund will form core of your portfolio and mid & small cap fund and multicap fund will form satellite component.Invest around 70% in core and balance in satellite both for your lump sum as well as SIP. It is not advisable to put entire lump sum amount in one fund.

        • Hi Anil,

          I have streamlined my investment portfolio, based on your recommendations, Pl have a look, I have selected single fund from individual fund houses. Let me know, if something needs to modified.

          CORE FUNDS (70%)

          Equity: Large Cap
          DSPBR Top 100 Equity Reg

          Equity: Large & Mid Cap
          UTI Opportunities

          HDFC Prudence

          SATELLITE FUNDS (30%)

          Equity: Mid & Small Cap
          Birla Sun Life Dividend Yield Plus

          Equity: Multi Cap
          Quantum Long Term Equity


          DEBT: PPF

          EQUITY: ELSS
          Canara Robeco Equity Tax Saver

  94. hi anil,

    great article. hats off. want to know sundaram mid cap fund is fine ? asking this question because no where this name came in all above comments.

  95. Hi Hemant / Anil,

    I’m planning to invest Rs. 5000@month for my just borned daughter’s education as well as marriage (20 years) purpose. Which mutual fund / insurance plan / PPF will be best. Please suggest.

    • Hi Nirupam
      For investment horizon of 20 years it is best to invest only in diversified equity mutual funds.You can select one fund from each category.

      • Dear Anil,

        I’ve selected following Funds –

        1 DSP Blackrock top 100 – Rs. 2000@month
        2 HDFC Top 200 – Rs. 2000@month
        3 Quantum long term equity – Rs. 1000@month
        4 IDFC Premier Equity – Rs. 1000@month

        Please advise.


  96. I wonder Why you have not added SBI MSFU Emerging Business Fund which is one of the best fund in Small and Midcap category in 1 Year 3 year and 3% year performance.

    • Hi Munish
      A mutual fund portfolio typically will have four to five funds.So it is better to restrict the choice to around 12 funds.It is not possible to include all possible funds in the list.The fund mentioned by you is good but risky.

  97. I personally feel recommending a fund on star rating is one of the easiest way of recommending fund, which we as a investor we can do our own by visiting value research online or mutualfundindia. I expect your recommedation of funds which are likely to be performing funds in the period to come by analayzing the portfolio etc.

    • Hi Munish
      My feeling is that most of the investors who ask questions do not do their home work before investing.It is obvious from the comments that some even do not bother to read the posts or the comments carefully before asking questions.In most of the cases we even do not know the objective of investment, time frame or risk appetite of the investor.Under these circumstances it does not make any sense to try to analyse around 50 mutual funds which can be considered for investment.In any case no one can predict which are the funds likely to be performing in the period to come.It is the job of the investor to track the funds in his portfolio.
      Any informed investor can analyse the portfolios of mutual funds by using the tools available online.We do not have so much time available for us to do this for investors.This is a thank less job and we are satisfied with whatever we are able to do to help the normal investors.

      • Hi Anil,
        I fully agree “This is a thank less job and we are satisfied with whatever we are able to do to help the normal investors.” People expect lot of things for free but most of them never even come back to say thanks. Sometime it really hurts. 🙁

        • Hi sir…it was very useful article at the begining of the year.But i want to tell you that as per your advise ,i have already started investing since October 2011 in following funds.

          1 HDFC Top 200. Rs.3000 per Month.
          2. ICICI Pru. Focused Bluechip Eq. Rs.2000 _______
          3. Reliance Eq. Rs.2000………………
          4. BSL Midcap Rs.2000………….
          5.Kotak Gold. Rs 1000……………..

          Now i want to add Rs 5000/month more to the above funds .Plz distribute the amount among the above funds .thanks for being so kind .
          Malik Arshad

          • Hi Malik Arshad
            BSL Midcap is a non performing fund.You can think of switching to BSL Dividend Yield Plus which is a better performing fund. You can distribute your additional investment amount between 1&2.

            • Hi Anil ji.

              Thanks for replying….i want to tell you that its been 4 months since i started investing in this fund ,is’nt there any time bar for switching from one fund to i need to submit an application to the fund house or just intimate them over phone….

              thanks and regards sir.
              malik Arshad

              • Hi Malik Arshad
                It is very important to do your home work properly before making any investments.Asking a question after you have started investments is not of much help.The fund was not performing even when you started your investments.Monitoring the performance of your funds is a must.
                Normally there is some exit load if you exit before one year.For starting SIP in another fund you will have to again fill up a form to give fresh mandate.For switching units in your existing scheme you have to fill up a transaction slip and give it to the fund house.Such things are not possible by using phone.

                • Hi.Hemant……
                  i have been introduced to TFL by my friend who seeks regular advice from you on financial matters…and undoubtedly started and even learnt ABC of financial planning from you guys..last year we both started investing in mutual funds through SIPs.thanks for that….my portfolio is as under:-
                  1.HDFC TOP 200———————————–RS.2000.
                  2.ICICI PRUD.FOCUSSED BLUECHIP EQ.—–RS.1000.
                  3.RELIANCE EQ.OPP.FUND.———————RS.1000.
                  4.BSL FRONTLINE EQ.—————————RS.1000.
                  5.BSL TAX RELIEF-96.ELSS-GROWTH———-RS.2000.

                  From fund 1 to 4 investment were started in September 2011.but fund at 5 was started in 2008…do i need to make any changes plz suggest.i shall be highly thank full.

                  • Hi Anupam,
                    Thanks for sharing TFL with your friends – “Gyan bantene se hi badhta hai”. 🙂
                    Your portfolio is good – only possible change that you can make is in place of BSL Frontline you can take DSPBR Equity.

                    • Hi Hemant…

                      Thanks for the reply….But here in J&K ,i am not able to get DSPBR funds for starting a new SIP after i redeeme BSL Frontline .,instead can you suggest in which of the above funds , should i add Rs 1000.more .

                      Thanks Sir…waiting for the reply….

                      anupam kaul.J&k.

                • hi anil ji..
                  its been an year since i joined ur e- class to get myself acquainted with this knowledge of financial planning. isn’t it strange that we get educated ,start earning but don’t know how to plan for a better future…….thank you for educating us and making us responsible enough to manage our life.yes i mean it and for this i pray to Allah for ur long and happy life and also keep up the good work.

                  Following is my portfolio, and i havebeen investing since sep.2011.DO I NEED TO MAKE ANY CHANGES …ARE MY FUNDS PERFORMING BETTER…?????PLZ SUGGEST ANY CHANGES IF ANY REQUIRED…
                  1 HDFC Top 200. = Rs.3000 per Month.
                  2. ICICI Pru. Focused Bluechip Eq.= Rs.2000 _______
                  3. Reliance Eq. = Rs.2000………………
                  4. BSL Div.Yeild = Rs.2000………….
                  5.Kotak Gold. = Rs 1000……………..

                  thanks sir.
                  malik arshad.jammu & Kashmir.

                  • hi mr Anil..

                    sir i have been waiting for your reply.kindly do me the favour by replying .i shall be thankfull to you..
                    malik arshad.

  98. Dear Anil ji,

    Investment in PPF has been increased to 1 Lakh but is this applicable for the financial year 1.4.2011 to 31.03.2012 ?

    Further I am investing 5000/- every month in PPF as well as in VPF. I am planning to increase additional 5000/- either of this two, please suggest where and why ?

    Thanks in advance.


    • Hi Ashok
      Rs 1lac is the limit for getting tax benefits and I am sure apart from PPF and VPF you must be be using other tax saving options as well.It does not make any sense to make any tax saving investments after crossing the limit only in debt.You should consider investing additional amount in diversified equity mutual funds.

  99. Hi,
    My name is Baskar, age-24 years, I am new for mutual fund investing, I would like to invest 1000 each in three of the mutual funds, I searched in value research online and money control. From that I found there are so many top ranked mutual funds, e.g 1) UTI div. yield fund 2) UTI opp. 3) HDFC Top 200 4) HDFC growth 5) HDFC equity 6) ICICI pru. focused blue chip fund 7) ICICI pru. discovery fund. 8) DSP blackrock top 100. Among 8 I select UTI divident yield fund(diversified), HDFC top 200(large cap), hdfc mid cap opp(mid and small cap). is it ok/good funds to invest? or I want your suggestions what are the mutual funds should I have to invest????

    Risk-low to medium
    Term-long term(10 to 15 years)
    Returns-appr. 15%

    • Hi Basker
      While selecting the funds the diversification should be done across types of funds as well as fund houses.It is not advisable to select two funds from the same fund house.Moreover, as a new investor you can think of investing in some balanced fund also. You can consider investing in these funds :
      ICICI Prudential Focused Bluechip Equity Fund
      UTI Opportunities Fund
      HDFC Balanced Fund

  100. Hello Mr. Anil Kumar,
    I am new in investment world. I am investing Rs.11,000/- month where 6000 is in tax savings fund. Can you please advice me whether my fund selection is correct or not –

    DSP-BR Equity Fund – RP (G) – 1000
    DSP-BR Top 100 Equity – RP (G) – 1000
    HDFC MidCap Opportunities (G) – 1000
    HDFC Top 200 Fund (G) – 2000

    HDFC Tax Saver (D) – 1000
    HDFC Tax Saver (G) – 2000
    DSP-BRTax Saver Fund (D) – 3000

    M. Khatun

    • Hi M. Khatun
      The problem with your fund selection is that you are investing in seven funds of just two fund houses.In order to spread your risk it is important to diversify across fund houses.By not diversifying across fund houses you have made your portfolio quite risky.Otherwise your fund selection is not bad.

  101. Hi!
    A couple of years ago, I had invested in
    1. Reliance Diversified Power Sector (SIP Rs. 500, 24 months)
    2. Magnum Contra (SIP Rs. 1500 12 months) …

    These funds do not seem to faring well. Can you please advise me whether I should hold on to these or redeem them ?


    • Hi Mrs. Shambhavi
      It is very important to track your investments.The performance of the fund must be compared with its index and peers.If the performance of the fund falters it is better to exit the funds.You should exit the funds if performance is not satisfactory.

  102. Hi hemant and anil sir..
    I am 23 year old singl boy. I am planning to invest 6000/- per month in 4 funds(1500 in each).
    I hv choosen 2 funds.
    1. Franklin Templeton Franklin India Bluechip.
    2.HDFC TOP 200.(is these are good choices)
    Also please suggest me with 2 more funds with name.
    Thanks in advance

  103. Hi Kumar
    You can consider investing in Quantum Long Term Equity and BSL Dividend Yield Plus.You have not mentioned your investment horizon.Since you are young I am assuming that you will invest for more than ten years.As your investment horizon is long it is advisable to keep tracking your funds

  104. Dear Hemant/ Anil
    I am planning to invest
    DSP BlackrockTop 100 Equity- 3000/-
    HDFC Top 200 G – 4000/-
    UTI Divident Yield Fund G-5000/-
    Birla Sun Life Mutual Fund Frontline Equity Fund G- 3000/-
    HDFC Prudence Fund G-2000/-
    Quantum Longterm Equity -5000/-
    Franklin India Bluechip Fund- G-1000 /-
    Please guide me whether I am on right path. Please suggest alteration if you feel any.

    • Hi Pravin
      Your fund selection is good but you don’t need so many funds.Just select one fund from each category.You can manage with four or five funds.

  105. Thanks anil sir,

    You didn’t tell me how is my selected 2 funds.are they gud choices?

    Actually i am planing to invest for 4 yeArs.please suggest me 2 funds from small & mid cap,balanced,multicap or tax saver fund OR whichever is best for me.

    • Hi Kumar
      Your existing funds are good.But you must keep your investment horizon long as you are quite young.Investment in equity mutual funds is not suitable for short term as in the short term you can lose money. If you are investing only for four years then consider balanced funds

  106. I am 69 yrs with surplus funds. I am investing through SIP monthly as folows”

    HDFC Top 200 : 10000
    HDFC Prudence: 10000
    DSP Blackrock 100: 10000
    Reliance RSS Balanced: 10000.
    Adquate savings In FDs and Bonds.

    Want to add one more MF. Kindly advise.

  107. Hi Ramesh
    I do not understand why you want to add one more fund. You can invest your additional amount also in your existing funds which are quite good. However, in case it is a must you can consider one multicap fund like Quantum Long Term Equity.

  108. Hi anil,
    I am planning to invest 1000/- per month for 6 years in 4 funds.
    Funds are…
    1. Franklin Templeton Franklin India Bluechip
    2. Hdfc top 200
    3. Sundaram select midcap reg.g
    4. HDFC Equity
    Are these gud selection.please suggest.

    • Hi Kumar
      You can select two good balanced funds of different fund houses like HDFC Balanced and BSL 95.

  109. Dear Sir,

    I am 28 years old new to investment and i want to invest around Rs.5ooo per month in SIP and same for my kid brother Rs.5000 he also of same age.Both earning around Rs.30000 per month
    Currently he has put 1000 each in hdfc top 200 and BSL Divident yield fund on his bank manager suggestion just few days back.
    Our goal is to invest for 20 years to make a corpus of 70 lacs each,
    please suggest how can we reach our goal and how much and how should we invest also do pension plans will be good option or not.

  110. Hi Hitesh
    Instead of going for pension plans it is better to invest in diversified equity mutual funds.Your kid brother has invested in good funds.You can consider the following funds for investment.
    ICICI Prudential Focused Bluechip Equity Fund
    UTI Opportunities Fund
    Quantum Long Term Equity Fund.
    For building a good corpus in 20 years the key is to start immediately and invest as much as you can.Ultimately the amount you invest in earlier years in going to contribute a major portion to your corpus.See if there is scope of saving more and increasing your investment amount per month.

  111. Dear Sir,

    I am investing Rs 2000/- each in HDFC Tax Saver Fund(G),Franklin India Bluechip Fund(G),IDFC Premier Equity Fund(G),Birla Sun Life Frontline Equity (G),HDFC Top 200 Fund (G) ,HDFC Prudence Fund (G). Total its coming to Rs.12000/- Per Month since April 2010. Please advice me whether its right mix, I am 35 years old, having 3 yrs old kid, planning for retirement and children education and marriage expenses.

    • Hi Vihari
      Your fund selection is good.However, in order to spread your risk it is better to select only one fund of a fund house.

  112. Hi Hemant,

    First of all kudos to you for such work, throwing some light into the personal financial jungle.

    I’m 37 years. There are plenty of debt funds available to choose from. I want to introduce and invest 20% in a debt fund as part of my overall portfolio. Could you please mention 1 or 2 debt fund so that I can study it and consider it for long term investment purposes?


  113. ji,

    I am investing Rs.25000 per year in ulip insurance scheme of Birla saral geevan and reliance from past three years.
    Now i decided to stop the ulip scheme and plan to invest in mutal fund for the same amount of Rs.25000/- yearly for next 10 years..
    IS IT CORRET , if so kindly sugges me a best fund to invest…


  114. Hi Hemant,

    I want to make a financial provision for my 6 years old daughter through mutual funds. I can invest Rs 5000/- monthly for nest 15 years. Presently I am invetsing only Rs 1000/-p.m in HDFC TOP 200. Pl guide.


    • Hi Sanjay
      You can select one more large cap fund like ICICI Prudential Focused Bluechip Equity and divide the amount between these two funds.Keep tracking your funds.

  115. Hi Hemant,

    I have gone through your comments and and getting wiser on investing through SIP. I have recently started monthly SIP with DSPBR Top 100 (Rs. 3000/), IDFC Premier Equity (Rs. 3000/-), HDFC Equity (G) (Rs. 2000/-) and UTI Opportunity (Rs. 3000/-).
    Is my fund allocation alright? Please suggest.

  116. Hello Sir,
    I am a final year student and have no experience in stock market and i want to start investing in share market.Plz tell me how and what shares to select.Sir plz guide me.

    • Hi Mahesh
      The fundamental rule of investment is to invest only in products which you can grasp easily.Hence stay away from direct investment in stocks and save your fingers from getting burnt.

  117. Hi Hemant & Anil,

    I am writing this one just to convey my good wishes for answering all the queries raised by people like me and continuously educating us to make ourselves financially abundant. Thank you again and wish you happiness, joy, good health and abundance always!


  118. Dear hemant/anil
    Before i started investing please clear my confusion-shall I go for the performance of the MF or the current value of NAV since most of the existed MF will have higher NAV compare to the NFOs.


  119. Hey Guys,
    I have been investing 5K each in the following funds for the last 2 years :-
    DSPBR Top 100
    HDFC Top 200
    ICICI Prudential Discovery
    IDFC Premier Equity
    Religare Mid Cap
    Please share your thoughts on my selection.

    If you guys think i need to rejig my portfolio,Please share your thoughts.
    How about replacing some fund from the same fund house ?

    • Hi Shailesh
      Your fund selection is fine.However, you are investing in three mid and small cap funds which makes your portfolio risky.Perhaps you can think of replacing Religare Mid Cap with some multicap fund like Quantum Long Term Equity. Also you should be investing around 75% in Large Cap And Large & Midcap funds and balance in the other funds.

  120. Hi,

    Can you please help me out on this.

    Birla sunlife tax relief 96 ELSS is good scheme to continue investing or shall i stop.

    I have started SIP in oct 2008.SIP of 1000 every month.

    • Hi Mihir
      There are better ELSS funds with five star rating like Canara Robeco Equity Tax Saver available. You can consider investing in them.

  121. Hi!
    I want to invest 2000 per month in debt funds for 2 years.In the table for best debt funds you have given 2 funds i.e DSP BlackRock Short Term and Franklin Templeton India Short Term Income .I have few questions
    1.Can you tell me the best performing short term debt fund in ICICI and HDFC for 2012?
    2. Whether I can increase the SIP amount in the future (for eg. after few months instead of 2000 ,can I increase my SIP amt to 2500)?
    3. If I withdraw after 2 years, will there be any exit loads or other charges?

  122. thanks hemant,
    For the valuable advice and the good work in guiding us all through and wishing you and -The financial literates team a very happy holi


  123. Hi.. just wanted to say at the very beginning, loved this post and glad to see you taking so much trouble to answer everyones doubts..

    My present portfolio is :
    1. DSP MicroCap fund @1000/m
    2. HDFC Equity @1000/m
    3. ICICI Focused BlueChip @1000/m

    I’m not sure in which category these come in, though I guess they are either midcap or mid&large cap funds. I was considering adding two more SIPs of 1000/month and would be really grateful if you could guide me in this regard.

    • Hi Dr Roshan
      These are the categories of your funds.
      1 Mid & small cap
      2 Multicap
      3 Large cap
      For investing Rs 5000/- per month you don’t need five funds. You can manage with these funds and just add Rs 2000/- per month to your third fund.

  124. Dear Sir,
    I am a regular reader of your article and tray to understand the mathematics of investment. Please educated me regarding NAV, how it is calculated, can we evaluate performance of any fund based on the value of NAV. Please clear my doubt regarding following understanding.

    1) If I invest 10000 INR with NAV of 100, does it mean I really purchased 100 units of value Rs 100 each?
    2) If after 10 years the NAV of above fund become 200, does it mean my found value become Rs20000, and if I sell it I will get Rs 20000
    3) If so, why agents, fund managers and others doing so many activities for me at free of cost
    4) I certainly believes that there is some cost associated in it. Please discussed elaborately all the cost involved.


  125. Hi,

    I need your assistance. I want to invest Rs.20,000 per month for 10 yrs in mutual funds. Can you please let me know in which all mutual funds I need to invest.
    Also is HDFC Top 200, DSP Blackrock top 100 equity and Reliance equity or growth good muutal funds to invest in.
    Thanks for your help. Awaiting your reply.

    • Hi Elizabeth Tellis
      You can consider the following funds for investment :
      ICICI Prudential Focused Bluechip Equity
      UTI Opportunities
      Quantum Long Term Equity
      BSL Dividend Yield Plus
      HDFC and DSP funds mentioned by you are also good. But you don’t need to invest in more than four funds.

  126. Hi Anil,
    Which is the best way to invest in monthly SIP?
    1. Investing entire amount in one single date of the month.
    2. Dividing the amount and investing in different dates of the month.


  127. Hi,

    Please suggest me MF to invest through Sip. I want invest Rs. 10000 p/mnth for 10 yrs.


    Tej Prakash

    • Hi Tej Prakash
      You can build a portfolio of diversified equity mutual funds by selecting one fund from each category from different fund house.

  128. Hi Anil/Hemant,

    I need some more clarity on the following issue:
    I am an executive in a PSU where apart form my compulsory regular deduction by corporation to my PF, I am contributing Rs. 15,000/ per month to my VPF account. I am planning to increase my contribution to my VPF account by another Rs. 5000/- per month. Or should I divert the same amount to MF through SIP? Which option is more beneficial in the long run? Please suggest.

    • Hi Bimal
      You are already contributing more to your VPF than what you should be doing. I really don’t see why you want to put more money in VPF when you will not get any income tax benefit from it.
      In the long term investing in diversified equity mutual funds will give you inflation beating returns which you will not get in VPF.

  129. Thanks Anil for your valuable suggestion! Since it is a critical decision for me, I want your help for proper fund allocation for long term benefit. My present funds through SIP are:
    1. DSPBR Top 100 (Rs. 3000/),
    2. IDFC Premier Equity (Rs. 3000/-),
    3. HDFC Equity (G) (Rs. 2000/-),
    4. UTI Opportunity (Rs. 3000/-).

    If I want to add say, another Rs. 5,000/- to 7,000/- per month on diversified equity fund, how to go ahead and re-organise my funds please? I’ll be diverting this additional amount from my proposed VPF account which I was planning till I got your view. I’ll awaiting for your comments.


    • Hi Bimal
      All the funds in your portfolio are good.You can invest additional funds in Fund no 1 & 4 which form the core of the portfolio.

  130. Dear Sir,

    I am 24 years old and i have invested 1000 Rs each in HDFC top 200, dsp blackrock top 100, ICICI Prudential Focused Bluechip Equity, BSL Divident yield fund, now i want to invest 2000 more should plas sugst where t invest.
    And as i have already invested in hdfc top 200 should i invest in hdfc balanced fund.

    • Hi Ishan
      All the funds selected by you are good.You can invest the additional amount also in these funds.

  131. Hello Mr. Anil –
    I have invested Rs.40,000/- year in AVIVA freedom life ULIP plan. Currently my total fund is running on BALANCED-II fund. Please check the below funds and advice me on which fund I should switch when SENSEX is performing good and where to switch when SENSEX is down. Many thanks in advance.

    Balance Fund II —–41——————5—————-33———–21—–
    Growth Fund II——16——————3—————-72————9-
    Enhancer Fund II —0——————-0—————-93————7-
    Index Fund II ——–0——————0—————99————–1-
    Bond Fund II ———45—————-21—————-0————34-Protector Fund II—–41—————–16—————14———–29-Infrastructure Fund -0——————-0—————-98————2-
    PSU Fund————————————————–99————1-

    Kind Regards,
    S. Karim

  132. Hi,
    I have been investing Rs 5k in HDFC Top 200 since last year and now would like to invest same amount in Mid-Small Cap or Diversified Equity MF. After initial analysis I shortlisted HDFC Midcap Opportunities, DSP BlackRock Small from Mid-Small Cap Fund and Canara Robeco Equity Diversified fund from Diversified Equity category.

    Can you please help me with selecting right MF and amount? My age is 30 and am ready to go for aggressive funds.

    Thanks !

  133. Dear Anil
    I am 24 years old and earn 35k per month.I have already made an investment of 56000 per annum in LIC &bajaj insurance.Apart from this i would like to make the following investments on monthly basis:
    ICICI Prudential Focused Bluechip Equity:1000
    HDFC Top 200:2000
    IDFC Premier Equity Plan A:2000
    Could you tell me whether the funds i have selected and the amount i am investing is correct or should i reduce it. And what should be the approximate duration to get decent returns.

    • Hi Swati
      You have selected good funds.Instead of thinking of reducing you should try to save and invest as much as you can to benefit from the power of compounding.Keep your investment horizon of more than ten years as you are young.

  134. i would like to invest around rs40000 anually ,which mutual fund should i go for .investment period from 15 to 20 years

  135. Hi,

    I want take 50 Lac Term Insurance plan for me. My age 30 yrs, I have two dependents (wife and one Kid).
    Even if Premium is little higher, need the best Term Plan in terms of claim settlement ratio.
    Could you please suggest whether I go for single Term plan or two plans of 25lacs each. Could you please suggest which plan to take.


  136. Hi Hemant/Anil..

    First of all hats off to you guys to help common man for their investments and guiding them in details moreover I can see almost every query is attended Simply AWESOME work !!
    I planning to start SIP for some of funds in diversified way I am 29 years old and planning to invest 10-12k/month as whole and has good risk appetite.
    I have shortlisted following funds so need your expert guidance to pick the best of them and suggestion on money allocation for each of them.

    HDFC Top 200 AND/OR DSP Black rock Top 100 equity ?
    Franklin India Bluechip AND/OR ICICI Pru Focused Bluechip Eqty ??
    IDFC Premier Equity
    HDFC Prudence
    UTI Opportunities fund
    BSL Dividend Yield Plus
    Reliance Gold Saving fund

    I may not be technically correct while comparing them plz overlook that and suggest the best !! 🙂

    Thanks in advance …

    • Hi Saurabh
      Your fund selection is fine but you don’t need so many funds.Just stick to the following funds.
      ICICI Prudential Focused Bluechip Equity
      UTI Opportunities Fund
      IDFC Premier Equity
      Reliance Gold Savings Fund
      Invest around 70% in first two funds and balance in the remaining funds.

  137. Thanks for the swift response Anil…Even I don’t want to invest in those many I just shortlisted them to pick d best :)…I heard lot about HDFC Top 200 and Franklin Bluechip u meant ‘ICICI Prudential Focused Bluechip Equity’ outperform them in longer run ?
    One more doubt is it good to invest in Gold thru MFs or direct ETF buying is better ?

    • Hi Saurabh
      It is difficult to say which fund will outperform in the long run.Right now ICICI Prudential Focused Bluechip Equity is one of the best funds.That is why tracking the funds after investing is important.
      If you do not have a demat account then you can consider a gold fund.

      • Thanks Anil..I have demat a/c and invest in shares too…so ETF is the way to go right as i can save fund management fee in that case ?

  138. Hi hemant/Anil,
    I have been following ur all articles and changed my investment strategy and organised a portfolio without gold.Since u have been mentioning that sip thru gold incurrs hideen expenditure i’m little confused either to go thru Gold ETF or no allocation to gold for my portfolio.

    • Hi Madhavan
      You can invest up to 10% of your portfolio in gold.If you do not have demat account then you can opt for a gold fund.

  139. Hi Anil,

    I have started a Jeevan Saral LIC policy in 2010 with monthly deduction of around Rs.9,000/- and it has almost completed 2 years. However, after going through your articles, I am no more interested in paying for LIC and instead want to invest through MF. But I have already paid more than 2 lac in last 2 years. Please suggest the best option to safely get out of this policy without much loss.



  140. We are investing in Mutual Funds through SIP for the last 10 months, so far we have the following funds: HDFC Prudence(Balanced), HDFC Top 200,(Large/Midcap), Reliance RSS Balanced, DSPBR top 100 Equity.)Large cap). each one is worth 1 lakh now. We want to review our portfolio in April. We have noticed that apart from these funds, the following funds are giving good performance. Quantum Long Term Equity(multicap), UTI opportunityfund(Large/Mid cap), and ICICI Pru Focus Bluechip Equity(Large cap.)’ We would like to know, if we need to change our portfolio, add some new funds or restart the earlier SIPS, We are not considering any Debt funds as we have adequate expossure to Bank FDs and Bonds).

    Incidentallly myself and my wife are Senior Citizens, and though our risk tolerance is low, we do have surplus funds and can invest 50000 per month. We donot have any specific goals in the near future and the main purpose of insvestment is wealth creation’

    kindly advise.

    • Hi Aarcee
      Your existing funds are good.The funds you have shortlisted are also good.If you have investment horizon of more than five years, you can consider investing in these funds via SIP route.

      • Thanks. It makes 7 SIPs. Are not they too many? Do they overlap each other?
        If so, could you also help us in chosing those funds which are more appropriate to our profile. Though we can easiy track all the 7 SIPS.
        Even if we stop 3 SIPS and start new 4 SIPS, we will of course have to continue tracking all the 7 SIPs alteast till some of them are sold.
        Are we right?

  141. Hello Anil,
    I am currently investing in HDFC Top 200 & DSPBr Top 100, monthly SIP of Rs.2000 each. The investment in above SIPs are for long term purpose. However i need to know where i could invest to meet my short term financial goals i.e. if i need a lump sum amount after 3 to 4 years and my monthly investment culd be Rs.2000 where should i invest? Kindly guide me.

  142. Hi Anil,

    I plan to invest for a short term i.e 2 years. Kindly suggest me investment approach, main purpose to see at least 30-40% returns.

    • Hi Naani
      I am not aware of any investment which can give you returns as per your expectations.

  143. Dear Hemant/Anil,
    Please suggest some good tax saving schemes for salaried people like me having income more than Rs. 5 lac per annum and paying avg. income tax Rs. 35,000/- monthly.

    • are u serious …paying 35K Income tax monthly and not doing any saving 1 lac under 80 c ?? if true Invest in Housing to cut on tax first …with this salary ur PF should suffice to do ~1 lac saving so no other ELSS/Tax saving scheme can help you here ..only housing is the way to go !!
      My 2 cents

    • Hi Bimal
      What is your exact income? Income tax mentioned by you appears on the higher side.

  144. Sir

    please tell me Reliance Regular saving fund and Reliance Equity plan growth is best fund for investment purpose.


  145. Hi,
    I am new for mutual fund invest, goint to invest in following funds monthly:

    1) ICICI prud. focused bluechip fund (1000 Rs) ——– Large cap
    2) HDFC mic cap or ICICI pru. discovery fund (1000) —- Mid & small cap
    3) UTI opp. or UTI divident yield fund (1000) ——– diversified

    my advisor asked me to invest in icici prud. foc. bluechip fund and icici pru. discovery fund (two funds comes under same portfolio so its easy to manage this is what my advisor said), but I am little bit confused while choosing mid & small cap. I am interest to invest in hdfc mid cap, I want ur suggestion or advice to select good mid & small cap fund, and also little bit confused investing in uti divident yield or uti opp. fund, Ur suggestion or greatly appreciated. Thanks in advance.


    • Hi Baskar
      It is advisable to select only one fund from a fund house. So you can invest in the following funds.
      ICICI Prudential Focused Bluechip Equity
      HDFC Midcap Opportunities
      UTI Opportunities

  146. Hi

    I am investing MFs through SIP. I pay each fund Rs. 2000/- Every month.

    1. HDFC Top 200 -G
    2. HDFC Tax Saver – G
    3. HDFC Prudence G
    4. IDFC Premier Equity G
    5. Franklin India Blue Chip Fund – G
    6. Birla Sunlife Frontline Equity – G

    Not sure whether the portfolio is diversified and have selected right funds. Please Guide me.

    • Hi Vihari
      Your fund selection is OK. Selecting three funds of a fund house is not a good idea as it makes your portfolio risky.

  147. ji,
    Presently i am purchasing the mutual fund units in demat form through bse star mt plat form..And i wish to buy icici focused bluechip equity fund retail growth…but as per bse star mf list it is mentioned as icici focused equity fund retail growth instead of icici focused bluechip equity fund retail growth. i am confused that both are same or two fund is there accordingly…please help to make clear….

  148. Hi,
    Im planning to start an investment in some low risk portfolios for atleast 10-15 years . I am 35 yrs and will be retiring in 2035.I am planning to part Rs.5000 pm from my monthly salary. I was thinking of investing in LIC Endowment Policy. But I heard its a bad idea since hey do not give return. I have not make any investment in my life. Please if any one can help me in this regard.


  149. Dear sir,

    I am investing MFs through SIP from 2009 September in:

    1. HDFC Equity -G – 2000 for 10 years
    2. HDFC Mid cap G – 1500 for 10 years
    3. HDFC Prudence G – 2000 for 10 years
    4. Fidelity Equity G – 1500 for 10 years
    5. Reliance Opportunities– G- 1500 for 10 years

    Planning to start 1500 Each in this year

    1. ICICI prud. focused bluechip fund G – 1500 for 8 Years
    2. UTI opportunities or Birla Sun Life India GenNext Fund (G) – 1500 for 8 Years

    please suggest. Not sure my portfolio is on right track

    • Hi Suresh
      Your fund selection is OK. However, selecting three funds of a fund house is not the correct approach.

  150. Hi Hemant & Anil,
    I want to increase the SIP premium of a particular fund. Is it possible to do that without applying separately?


    • Hi Bimal
      No, you will have to apply again and give a fresh bank mandate. You can retain your old folio no.

  151. i want to purchase bond directly from exchange specially giving returns upto 12 to 14 percent. but as i am new to this type of market please guide me how to pick godd bonds and what are the risk in this.

  152. i want to purchase bonds to be redeemed in 2014 if i dont sell till that time will the redeemed amount will come directly to my link saving account

  153. hi anil my brother is planing to married by 2014 so he wants to invest in mutual funds to save some for his wedding but no one in our house invests in mutual funds so pls tell us weather he shoud invest if yes then in which funds. he can invest 5000 .kindly help us

    • Hi Shephali
      Investment in equity mutual funds is done to meet your long term goals when your investment horizon is more than five years. For his short term requirement he should go for a bank recurring deposit.

  154. I must say, Anil Kumar and Hemanth… you are providing some very valuable advice to many of the queries posted in this forum. Keep up the good work.

    I have a simple question. Say, I have started a SIP for a Mutual Fund for 1 year (12 months). The transaction is done say through ECS from a bank. After paying 12 installments, could I continue to buy more units of the Mutual Fund every month and still call it as a SIP. Would Mutual Fund company allow it? Or should I inform the company to extend the SIP period?

    • Hi Hari Krishna
      Normally a month before the closure date of your SIP you will get a form from the fund house for extending your SIP. You can can fill the form and give to the fund house if you want your SIP to be extended.

      • Thanks Anil for a prompt reply.

        If I don’t extend SIP, could I still purchase units of the Mutual Fund? Or is SIP terminated by the fund house if I don’t extend. One problem is that for SIP, I need to provide a date (in a month) to the fund house and automatically, the amount is taken from my bank through ECS. I was more looking for an option of purchasing units at my own convenient time in the month rather than on a specific date of a month. Please clarify whether this is possible.

        • Hi Hari Krishna
          Once you invest in a mutual fund you get a folio number. Whan you have the folio number you can buy units of that mutual fund or any other mutual fund of the same fund house without giving any new application at any time as per your convenience. You have to just fill a transaction slip in which your folio number has to be mentioned and enclose your cheque with that. Lump sum investments are possible in the funds in which you were running SIPs previously or are running SIPs now.

        • Hi Hari Krishna
          You can have a monthly SIP of a small amount say Rs 500/- or Rs 1000/- in most funds. But if you make a lump sum payment as per your convenience then you have to probably invest a higher amount of around Rs 5000/-. You have to check this from the fund house.

  155. earlier i asked a question on bond but no reply now again one q. as in case of mutual fund dividend in the hand of investor is tax free because mf itself deduct the tax and directly pay to i tax deptt but in case of bond does issuer pay interest after deducting any tax or investor receive all intt without any deduction nad he himself is responsible to pay tax. please reply authentically

  156. Dear Mr.Hemanth presently i want toinvest in sip 10000/-permonth
    i dnt know wich is the best can u pls suggest me?

  157. Hi Anil,
    I’m new to investment terms.
    I have noticed the performance reports(returns %) of Investment firms in terms of duration like 1m,3m,6m,1yr,3yr,5yr and 10yr.
    In that short term durations(1m,3m,6m,1yr),return % is always in minus.
    Here is my question,
    1.So,does it means that short term investments will not deliver expected returns?
    2.we can expect positive returns only in long term investment like(3yr,5yr or 10yr)?

    Please clarify me on this..waiting for your reply..

    Thanks in advance,

    • Hi Aravindh
      Investment horizon for investing in equity mutual funds should be more than five years. So you should ignore short term returns.

  158. Hi,
    I am planning to invest in the MFs through SIP of 1000 each for a period of around 10 years, please advise.
    1.Franklin Templeton Franklin India Bluechip
    2.HDFC Prudence Fund
    3.Quantum Long Term Equity
    4.IDFC Premier Equity Plan A
    5.UTI Opportunities
    6.Reliance gold savings fund (Not sure of this, though just wanted to add a Gold fund in my portfolio)

  159. sir,

    i m investing in :-
    DSP BR top 100 equity growth—2000/-
    DSP BR micro cap fund growth—1000/-
    HDFC Top 200—-1000/-
    HDFC Mid cap opp—1000/-

    kindly advise me on my portfolio

    And i m planning to invest 1000/- more in Reliance gold saving fund is it OK.

      • Anil sir, I have noticed you always recommend to invest in only one fund from one fund house. If a fund house is doing well and offering good funds, what’s the harm in investing more than one?

        • should i continue with these funds or switch to some other funds. pls advice.
          should i invest in reliance gold saving fund????

          • Hi Abhishek
            Select four funds from four fund houses.You can consider investing in Reliance Gold Savings Fund.

        • Hi Vivek
          I do not invest in more than seven funds at any time. I have shortlisted seven fund houses. Each fund house has atleast two good funds. If I select all good funds I will be investing in more than a dozen funds which will be overdiversification. Hence I stick to only one fund from a fund house.
          Many fund houses have even three good funds. But the problem is that many times all good funds of a fund house are managed by the same fund manager.For example Prashant Jain manages three five star rated funds of HDFC Fund house.It will be foolish to invest in all three funds as a large number of stocks in three funds of the same fund manager will be identical.Hence to spread your risk, diversification across types of funds as well as fund managers is important.

          • Would you mind sharing which fund houses you have short-listed? You don’t have to if you don’t want to 🙂

            • Hi Vivek
              My short- listed fund houses are :
              Reliance Mutual Fund
              HDFC Mutual Fund
              ICICI Prudential Mutual Fund
              UTI Mutual Fund
              Birla Sun Life Mutual Fund
              Quantum Mutual Fund
              Canara Robeco Mutual Fund
              Major portion is invested in first five fund houses.

  160. I would like to avail your investment consultancy services kindly let me know the full details. Secondly iam investing in TATA AIG Monthly Investment Plan (SIP) & SBI Gold Fund (SIP) Kindly let me know the future of this companies is it worth investing ??


  161. I am having the following SIPS for one year now:

    UTI opportunities 5K
    ICICI Pru focus Bluechip 5k
    HDFC top 200 5k
    DSPBR top 100 : 10 k
    HDFC Prudence 10 k
    I am impressed by your advice in these columns.
    I want to do an annual review now.
    I was thinking of replacing HDFC top 200 by HDFC Equity or Quantum LT Equity.
    But ICICIdirect does not allow Quantum’
    I was thinking of replacing HDFC Prudence with HDFC Balanced.
    Iwas thinking of replacing DSPBR top 100 by adding aditional funds in ICICI Pru focu blue chip.

    Kindly advise.

    • Your fund selection is very good. Is there any reason you want to replace them?
      You can look to add a mid-cap fund to your portfolio like IDFC Premier equity.

      • Thanks Vivek. There is no major reason why I thought of replacing the funds. I just thought I would do an annual review, ……the newer funds appeared to me ro be giving a little better performance and …..I had 2 funds from one fund house i.e. HDFC.

        I know by replocing these funds I would have to track new as well as old funds. That is OK.

        Regarding IDFC Premier equity, it being a mid cap/small cup fund , I would like to avoid it, I being a senior citizen (70 yrs) and would prefer less risker funds in the Balanced and Large cap categories.

        Any further advise is welcome. Thanks again.

        • Hi Aarcee
          I agree with you. Since you are a senior citizen your risk aversion is understandable. Your decision to invest only in balanced funds and large cap and large and midcap is correct. Yes, you can increase your exposure to balanced funds. The performance of HDFC Balanced and ICICI Prudential Balanced has been much better than that of HDFC Prudence. HDFC Equity and HDFC Top 200 are somewhat similar funds but HDFC Equity being a multicap fund is riskier.Hence you can consider investing in balanced funds which will also increase your debt exposure.

  162. Hi
    I need to invest Rs 40k (one time investment) for a period of 3 years, i am totally new and blank about mutual funds as i have all investments with LIC only other than pf. please guide me regarding investing this money.

    • Hi Akshay
      Investment in diversified equity mutual funds is done when your investment horizon is more than five years. Moreover, it is preferable to invest systematically every month. Lump sum investment is not suitable for fist time investors. You should go only for bank fixed deposit.

  163. Hi,

    I am planing to invest Rs..5000 in SIP, can u please suggest me 3 good funds. I have seen the above list it looks very nice but listing given 3 months back, are these funds still performing gud?

    • Hi Sitaram
      Three funds are not needed for investing only Rs 5000/- per month. Since your investment horizon is not known you can start with a balanced fund like HDFC Balanced.

  164. hello,

    I would appreciate if you can advice as to how I can achieve 20 lakhs in 7 years, my age is 48, this is for my 2 kids.

    I know its never to late , as the future is always bright.

    Thank you

    • If you are saving for long term for your kids, you should invest in equity MF and PPF.

      Assuming 15% returns from equity MFs and investment of around 12k per month, should give you around 15 lakhs.

      Assuming 8% returns from PPF and investment of 5k per month in the PPF account, should give you around 5 lakhs.

      For more information and ideas you may read: –

    • Hi Fernandes
      Since you are a first time investor and your time horizon is not very long you can consider investing in a balanced fund like HDFC Balanced.

      • hello Anil,

        appreciate the answers to my query , would also appreciate if me decide to parks around rupees 6000/- per month , what funds do you recommend and what time frame and will the benefits be.


  165. Respected HEMANT JI
    i m investing 1000 p.m in rRELIENCE REGULAR SAVING GROWTH OPTION from november 2010
    should i continu
    or stop
    i should redeem
    or i should stop only sip and should not redeem
    pl guide me

    • Hi Amita
      You should check the performance of the fund by comparing against its index and peers and exit if the performance is not satisfactory.You should redeem when you need money.

  166. Hi Hemanth,

    Plx comment on my Portfolio which is as follows

    MF Amount/ Month( SIP)
    HDFC TOP 200 Growth 5000
    DSPBR Top 100 Equity Reg 5000
    Franklin India Blue Chip 5000
    SBI Emerging Fund 5000
    Shud i invest in ” Quantum Logn Term Equity Fund”



    • Hi Nitin
      Your fund selection is fine. You can consider investing in Quantum Long Term Equity.

  167. Appreciate your quick response, wat r ur views on “Motilal Oswal MOSt Shares NASDAQ 100 ETF – Growth” . If u had to recommend a MF wat wud that be? Which is a better MF ” Quantum Logn Term Equity Fund” or ICICI Prudential FMCG Fund – Growth – Growth

    Many thanks & Regards


    • Hi Nitin
      When comparing funds you have to compare apples with apples and not oranges. Both the funds mentioned by you are good but can not be compared as they are of different types.

  168. Hi,

    I am 27 and thinking about retirement planning. Currently i am investing 2000/month in PPF. Which mutual fund should i consider for long term (for 20 yrs). I am thinking about HDFC Top 200 for 3000/month. Is this a best choice?

    • Hi Amjad
      Since you are a first time investor you can start with HDFC Balanced fund and later on add more funds to your portfolio.

  169. Hi Anil,
    I am investing 20k per month thru SIP in the below funds.I feel am investing in more no of funds. Please let me know am I going in right path.

    Planning to invest for a long term.(more than 10 yrs)

    Franklin India bluechip fund – Rs.4000
    ICICI focused bluechip fund- Rs.4000
    HDFC top 200- Rs.4000
    HDFC equity- Rs.2000
    IDFC premier equity fund-plan A-growth-Rs.2000
    Reliance gold savings fund-Rs-4000


    • Hi Karthick
      Your fund selection is fine. However, two funds of HDFC Fund house are quite similar and you can consider retaining only one.

      • Hi Anil ji,

        My congratulations to you and Hemanth for providing this valuable service.
        This article with specific guidance and inputs on the Mutual Funds for 2012 is very handy and helpful.
        Coming to myself, I am 38 years old and consider myself as an aggressive investor profile. I am currently investing 27k per month via SIP.
        As I am planning to invest for a long term (more than 15 yrs), please advice and comment on:
        1. My current portfolio make up
        2. I understand that one should re-balance the portfolio and as you also have advised one should keep a watch on the funds. So what are the trigger(s) to act upon the specific fund to do a switch to another fund (on one hand mutual funds returns need to be valued from a long term perspective – so what could be the ‘right’ time to decide the performance of the fund)

        Birla SL Dividend Yield Plus(G) fund – Rs.6400
        HDFC Top 200 Fund(G) fund- Rs.10600
        HDFC Mid-Cap Opportunities (G) Fund- Rs.6000
        HDFC Equity Fund (G) – Rs.2000
        DSP Black Rock Top 100 Equity Fund – Regular Plan (G)-Rs 2000


        • Hi Raghu
          Your funds are fine but it is not good to invest in three funds of a fund house. It is diversification in numbers but not in style. Track the funds atleast once a year by comparing the performance with index and peers.

          • Thanks a lot Anil ji. But each of the mutual fund is managed by different fund manager, so could you please help me understand the rationale of not to invest with same fund house. I may be incorrect with my understanding, so please validate and correct.

            • Hi Raghu
              To spread your risk it is advisable to diversify across category of funds as well as fund houses. Moreover, two HDFC Funds in your list are managed by the same fund manager and many stocks in these funds are identical.This goes against the principal of diversification and increases your risk.

  170. Hi Anil,

    Woukld like to have your views on ” Motilal Oswal MOSt Shares NASDAQ 100 ETF – Growth” . This is the only fund of its kind. Your thoughts on this. Its only been a year since its inception and it has annual return of alomost 36%.



    • Hi Nitin
      It is advisable to invest only in funds with a consistent long term track record.

      • hello Anil,

        I know this sounds stupid , am completely new to this SIP stuff, but I love the money this makes.
        am 48 years young and would appreciate your advice as to how do I go about this and whom to contact .

        I do need this money to grow for my 2 kids.

        thank you

        • Dear Mr. Fernandes
          If you are NET savvy you can open a 3-in-1 account in or HDFC bank account with ISA (Investment services facilities) and can buy all the SIP online, otherwise you have to buy the SIP from individual mutual fund companies / AMC’s.


        • Hi Fernandes
          Investment in equity mutual funds can be done if your investment horizon is long. You can consider balanced funds if your investment horizon is around five years.In the short term investing in equity funds is risky and you can even lose your money. Your risk appetite and capacity to take risk is important. After selecting the funds you can approach the fund houses.

          • hello Anil,

            thks for the reply, you see I do have a SBi Infrasturctre fund Growth, its not doing too well, what should one do, if i stop will me lose.

            secondly i also do have a reliance longtime equity it ok , should I stay.

            how do we calculate what we get from the funds.

            thank you

            • Hi Fernandes
              While investing in equity mutual funds you should adopt core and satellite approach. 70% of your allocation should be in large and large & midcap core funds.
              Exposure to sector/thematic funds should be very small.
              Evaluate the performance of your funds atleast once a year and get rid of nonperforming funds.

  171. hi
    i am 40 yrs old working woman, my daughter is in XI. i want to invest 2000/3000 per month for 5yrs for her higher studies. suggest me the best mf for SIP.

    • You may consider investing in one large cap and one balanced fund.
      For large cap you may consider DSP Top 100 or ICICI bluechip.
      For balanced you may consider HDFC Balanced or HDFC Prudence.

  172. Hi Anil,

    Will be very thankful if you kindly guide about “Multiple Yield Fund — Series 22 — Plan F” by ICICI PRU.” Should we invest one lump sum (50K) on it or not. time line – 5 years.


  173. Hi Hemantjee & Aniljee,

    First of all I would like to thank you for providing us a wonderful guidance.
    I am 28 Years Old and starts investing in SIP as per all your suggestions and Posts on mutual Fund.I am investing Rs. 9000/- month in SIP.Kindly look at my Portfolio and suggest whether I am in right direction or not.
    Large Cap Mutual Fund:-
    1. DSP BlackRock Top 100 Equity:- Rs.1000/-
    2. ICICI Focused Bluechip Equity :- Rs.2000/-
    Large & Mid Cap Fund:-
    1.HDFC Top 200:- Rs.2000/-
    Multicap Fund:-
    Quantum Long term Equity:- Rs.2000/-
    Mid & Small Cap Fund:-
    IDFC Premier Equity Plan A Growth:-Rs.2000/-
    Kindly tell me how much i will get if i got invested in these funds for 15 years?

    • Hi Vikash
      Your fund selection is fine. Stay invested and keep on monitoring the performance of funds.

      • Aniljee,

        Thank you very much for your comment. Can you suggest which payment date would be fine like 1st,7th,15th or 28th.Does it affect on purchasing the units?

        • Hi Vikash
          SIP date does not matter in the long run. You can have any date as per your convenience.

  174. This really makes a interesting reading and very useful one.

    Recently I had invested close to Rs. 2 lacs in gold in the form of Gold Coin(99.5 purity) in the month of March 2012 and had kept in the bank locker. This is a long term investment (8-10 years)

    What do you feel about the future gold prospects in terms of return down the line 8-10 years in future? Is it a good long term investment? Please guide.

    • Hi Cherian Mathew
      You can have around 5% exposure to gold in your portfolio. Future returns can not be predicted.

  175. I am 36 years old, I am planning to start investing atleast Rs. 1000 to Rs 2000 on a monthly basis in any SIP/ELSS.

    As per the trend and performances in the past, present and future. Which fund you suggest to invest?

  176. Hi Hemant,
    I just want to know that If I am going to start an investment in SIP then which 3 would be the best to choose?
    You can tell me top 5 so that I can take 3 & invest 1000 Rs p.m on 3 MF’s.

    What I have selected: DSP BR, HDFC Top 200 & Reliance Growth. Others also included franklin & fidelity.

    Please suggest.

    • Hi Aman
      For investing a small amount you don’t need three funds. If you are a first time investor you can start by investing in a balanced fund like HDFC Balanced. Later on you can add more funds as your investment amount increases.

  177. Hi,

    Is it possible to invest directly into Mutual Fund bypassing the distributors ? I understand that it could reduce the processing fees related overheads for the subscriber but are there any issues if one takes this approach ? Does all fund houses provide this ?
    Please advice.

    • Hi Raghu
      Yes, you can directly approach all fund houses directly for investment without involving any distributor.

  178. Hi Anil,

    First of all i want to thank you for your advice regarding my MF portfolio which has provided me much needed assurance about it. Could you help me in clearing a couple of more queries please.

    1. I want to start SIP in a balanced fund for 2000 pm for med-long term. i am confused between HDFC balanced fund and HDFC Prudence fund. Please guide me on which one should i opt for. HDFC balanced fund has been performing slightly better from the past couple of years but Prudence is an experienced fund.

    2. I have stopped my SIP in AIG world Gold fund but it is not recovering its losses (arnd 20% 🙁 ). Should i sell it, switch it, or wait for it to come back to even point?

    Thanks a lot

    • Hi Rajan
      You can invest in HDFC Balanced Fund. Exposure in gold should be small.It is difficult to say anything regarding gold fund. If you don’t need money then you can wait but if you need money then you can exit.

  179. Hi, wats ur take on IDFC PREMIER Equity fund? I am a bit skeptical abt investing Fidelity equity after I heard the news of it being take over by L&T. Would u suggest a MF for a short term perpesctive. Say abt 3 to 5 years.

    • IDFC premier equity is a good fund but considering it is a mid-cap it carries more risk. 5 years is a decent time period to invest in equity MF.

      You can stay away from Fidelity for now and take a call after seeing their performance in coming year.

    • Hi Nitin
      Investment in equity funds is done when your investment horizon is long. For medium term for a first time investor a balanced fund like HDFC Balanced should be fine.

  180. Dear Anilji,

    Now I am in a dilemma and hope only you can give me suitable advice, hence please help.

    Actually I am investing 27K in mutual fund inline with your advice, but now I have booked a flat for which an amount of 26,00,000/- Home Loan has been sanctioned. EMI may be around 26K.

    So please advice me whether I should stop all Mutual Fund investments and deposit additional amount in Home Loan account apart from EMI to reduce the interest or should I continue to invest in Mutual Funds apart from EMI for Home Loan ?

    Please note I can manage to get additional 25-30K apart from home loan EMI.

    Thank in advance.

    best regards,

    • Hi Murli
      Investment in equity mutual funds is done to meet your long term goals. Normally you should invest only that part of your savings which you will not need for atleast ten years.

      • Thanks a lot Sir, for your kind reply.

        I can save 25K for atleast 10-15 years apart from my EMI for home loan, but should I go for Mutual Fund or should I deposit the same towards extra payment of home loan, so that interest burden shall be reduced.

        I have to go for either of two option :
        i) Continue invest 25K in mutual funds.
        ii) Pay extra 25K t0wards home loan, apart from regular EMI.

        Please suggest.

        Thanks & best regards,

        • It’s a personal choice Murali. What would give you more peace of mind?
          1) Finish home loan faster and lead a debt free life? OR
          2) Invest in MF and keep building retirement corpus to secure future?

          I personally pre-pay certain amount towards my home loan in order to keep the annual interest down to 1.5 lakhs [max tax exemption allowed for home loan interest]. This way I enjoy tax benefits and invest regularly in MFs as well.

  181. Dear Hemant/Anil,
    Grateful, if you please clarify whether there is any difference in interest rate between PPF and VPF A/C (of an employee in PSU).


  182. Dear Anil Ji,
    I am 39. I have planned to invest further Rs.12000/- to 14000/- per month through SIP for next atleast 15 years. Please sugegst some good 3-4 funds for me to plan out my future goal for wealth creating for my kids’ future plans. Request your help in distributing this amount into 3 to 4 good funds for SIP. Pl suggets some good, well performing funds for me to invest.


    • Hi Vikram
      You can consider investing in the following funds :
      ICICI Prudential Focused Bluechip Equity
      UTI Opportunities
      Quantum Long Term Equity
      IDFC Premier Equity
      Invest 70% in first two funds and balance in the remaining two.

  183. hello hemant/anil

    well i m 30 year old i want to invest 1.5 lac for a year i want to buy a term insurance i looking towards aviva my premium would be near about 4700
    for a year is it a good option and second i want to invest in sip but i dont know
    which is good for me see i want to invest 10k per month for 20 years so please suggest me.

    thank you