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FSM In Media: SIP or Lumpsump investments?
February 22, 2017

This chat transcript was published in on Tuesday, February 21, 2017.

Author : Dr. Renu Pothen

SIP or Lumpsump Investments?

guest: I have started investments in the below schemes recently. My goal is long term investments nearly 20 years and 15 years. Can you please suggest me below schemes are good or not. SBI Blue Chip (RS-3000 P/M) HDFC Mid-oppertunity (RS-3000PM) ICICI-Pru value Discovery Fund (RS-2000P/M) DSP-BR Micro cap (RS-2000P/M) BSL 95 Balanced Fund(RS-2000PM), Please advise, can i continue on the above scheme.

Dr Renu Pothen: The above mentioned schemes are good performers in their respective categories. You can continue investing into them.

guest: Dear Sir, I am 45 yrs old. Will do job until 58 yrs. I have SIP of 1 lakh per month for last 3 yrs in total 9 funds. LARGE CAP 1 FUND : BSL FL--20k, MULTICAP- 3 FUNDS : BSL EQUITY --10K, ICICI VALUE DISCOVERY --10K, MOST FOCUSED MULTICAP 35 10K, MID/SMALL- 5 FUNDS: HDFC MIDCAP OPP --10K, UTI MIDCAP-- 10K, BSL PURE VALUE --10K, CAN ROBECO EMERGING EQ --10K, DSPBR MICROCAP-- 10K. Though number of funds is more, I had to select since the amount is more, I did not have the confidence to choose less funds in mid/small cap category as the stock selection is very important. However, since last 3 yrs all the funds have been performing well. Please guide me is this ok? Or need to change anything. I have enough investment is FD, running PPF, LIC premium and Family mediclaim. Now I have 25 lakh cash to invest. What should be the best way? Thanks and Regards.

Dr Renu Pothen: Our suggestion is that you should cut down on the number of funds in the different categories (multi cap and mid/small cap).It would be better if you have only 1 or 2 funds in each category depending on your risk profile and time horizon. For the INR 25 Lakh, you need to decide how much of this surplus need to be invested into equity and debt funds. For the debt option, you can consider investing via lumpsum while for the equity funds, investing via SIPs or STPs would be ideal.

guest: I am planning to invest in Debt fund for long term(5-7 years). Is investing lump sum a better option than SIP in debt funds? (Assuming volatility for debt funds is much lesser to equity funds)

Dr Renu Pothen: For debt funds, we suggest that you invest via the lumpsum route.

guest: Dear Sir, I\`ve HDFC Short Term Fund d-G (Lump Sum Rs. 46000/-) and ICICI Balanced D-G (Lump Sum Rs. 26000/-) since Nov., 2016 for goal 6-12 month ahead from now, besides other funds for long term. I want to invest another 10000/- P.M.. Should i invest all 10K in only in HDFC Short term fund or 50% each in both the funds, please suggest.

Dr Renu Pothen: If your goal is 6 months to 1 year then we would not suggest investing into a balanced fund.In this category more than 70% of the surplus is invested into equities and hence the holding period for an Investor should be more than 3 years. If your time horizon for investing another INR 10,000 per month is 12 months, then either ultra short term funds or short term funds need to be considered.

guest: Can you pls advise as i am investing in SIP monthly -Axis ELSS since Aug 2015. Also please suggest if motilal most focussed Midcaps 30 and 35 are fine for midcap funds or you any other recommendations. Thnks

Dr Renu Pothen: : Axis Long Term Equity Fund is one of our recommended tax saving funds. You can continue with this investment. For the multi cap/mid cap funds some of our recommended funds are Kotak Select Focus Fund,ICICI Prudential Value Discovery Fund,Mirae Asset Emerging Bluechip Fund and Canara Robeco Emerging Equities.

Disclaimer:iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's offer document/scheme additional information/scheme information document. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice.


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