Even as the Sensex is very close to its peak of 53,000 points, there is an element of risk even for mutual fund investors should the market fall from these levels. It is therefore advised to look for a diversified portfolio, that comprises both equity and debt. We have chosen 5 mutual fund schemes for investors, including pure vanilla equity funds, a money market fund for safety and a savings fund, which tend to be more diversified.
Kotak Equity Opportunities Fund
Kotak Equity Opportunities Fund has been rated 5-star by Value Research. The fund invests in a mix of large and mid cap stocks across sectors.
A SIP in the fund started 3-years ago for Rs 10,000 each month would have generated a corpus today of more than Rs 5.30 lakhs. Kotak Equity Opportunities Fund has given a returns of 54% in the last 1-year, while the 3-year returns are 18% on an annualized basis and 17% for 5-year returns on an annualized basis. Investors can look at investing in the growth option as the dividends are anyway taxable. The growth option has a net asset value of Rs 197.184.
The fund has investment in large size companies and more than 95% is invested in equities.
Canara Robeco Bluechip Equity Fund
This fund has a 5-star rating from CRISIL. Canara Robeco Bluechip Equity Fund invests its money in largecap stocks, which means should the indices fall, so would returns, since bulk of these are index stocks. The fund has given a superlative returns of 45% in the last 1-year, while the 5-year returns are 16% on an annualized basis.
Investors can start an SIP with a sum of Rs 1,000 each month. Canara Robeco Bluechip Equity Fund has about 94% of its money invested in largecap equities and the balance in cash and cash equivalents. The stocks that are being held in the portfolio include names like HDFC Bank, Infosys, Reliance Industries, ICICI Bank and Tata Consultancy Services.
HDFC Equity Savings Fund
This fund has been rated 5-star by Morningstar. This is a good fund for those looking at a very balanced portfolio. Equity-savings fund tend to invest, though not exactly about a third of your money each in equity shares, bonds and arbitrage opportunities. It may not be that exactly the same amount is parked, but, there could be slight variations. In short, they are pretty much tilted towards diversification and hedging risks from volatile equities.
The fund’s debt holdings are in the bonds of Punjab National Bank, Canara Bank, NCDs of Vedanta, Treasury bills etc. On the other hand the equity exposure is to stocks like HDFC, Infosys, Reliance etc. A good mutual fund scheme for those looking to diversify their portfolio.
ICICI Prudential Money Market Fund
If you are looking at zero risk for your investment then money market funds are the way to go. Returns are not too great and could be like bank deposits. However, the money is secure as money market funds mostly invest in government securities.
To churn slightly higher returns they also invest in corporate debt. 100% of the amount is generally invested in debt. The fund has not generated a great return and 1-year returns are just under 4%, while 5-year returns are near 7%.
This fund has been rated as 5-star by Morningstar.
BOI AXA Tax Advantage Fund
These are ELSS schemes that give you tax returns under SEC80C of the Income Tax Act. BOI AXA Tax Advantage Fund like most other ELSS schemes invest almost all of their money in equities. This fund has parked almost 98% in equities.
The returns from the fund have been as high as 71% in the last 1-year, while the 3 and 5 year returns are around that 19% mark.
This fund has a 5-star ratings from Crisil.
Mutual Fund investing is subject to market risks. One should exercise caution and invest only if he or she is able to bear losses. The above article is for information purposes only. Neither the author nor Greynium Information Technologies would be responsible for losses incurred on decisions based on this article. Please be careful and consult an advisor before investing.