Mutual fund route for new investors

For example,I advise you to put around 30% in debt and around 70% in equity if you are 30 years of age.

For debt schemes,you can choose from floating rate fund and dynamically managed income schemes. For equity schemes,I suggest you invest in large cap equity diversified funds with a proven track record. The chosen schemes should also have a track record of doing well in bear phases. Sector funds should be avoided due to the extra risk associated with them. Index funds can also be a preferred option as the management cost would be relatively lower.

In the current scenario,should I go for a dividend option or a growth option?

It depends on one’s overall investment objective and income. If you have a long-term investment objective and are not keen on money coming back at various intervals,opt for the growth option. If you need a regular inflow at various intervals,opt for the dividend option. Tax on dividend as well as long-term capital gains are exempt at this stage. From the tax planning point of view,both options are neutral at this stage.

I am an investor with a moderate risk profile and long-term objective. Where can I invest my money?

It is recommended to take the SIP/STP route with a long-term perspective to get the true benefits of rupee cost averaging in well-diversified equity oriented schemes like HDFC Top 200,Reliance Growth,Birla Sunlife Frontline Equity.

I am holding units of Fidelity India Growth Fund. What is your view on this scheme ?

With a more concentrated portfolio and more than 70% holding in large caps,the fund has been able to perform well. With the mandate of going for value buying without any sector bias,the fund has performed better than its peers and benchmark in both the crisis as well as revival. Going ahead,we recommend you to continue your investments in this fund as it has the potential to deliver you good returns in long term.

How should I keep track of my portfolio?

There are two ways to keep yourself updated with your portfolio performance. You can consult a professional financial adviser who can track your portfolio and keep sending you updates at regular intervals. He can advise you

as and when required and keep you informed about changes in the market that can affect your portfolio. Portals like valueresearchonline.com can also help you.

—The author is CEO,Invest Shoppe India Ltd