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Regarding mutual fund investment

Lalit Sangani (M.Com. Asst. Manager Account) (736 Points)

12 December 2014

Dear All,

If any one know about below Mutual fund please guide me:

1. UTI Transport and logistics growth equity

2. Sundaram simile fund growth equity

3. UTI midcap growth equity

4. ICICI Prudential mid cap

5. DSP micro cap fund

What is the reask after purchase of the above m.f.

Thanks

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5 Replies

Arpit Shah (Accountant) (21438 Points)
Replied 12 December 2014

A. Company Fixed Deposits v/s mutual fund:
A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the investment objective of the scheme. An investor can buy in to a portfolio of equities, which would otherwise be extremely expensive. Each unit holder thus gets an exposure to such portfolios with an investment as modest as Rs.500/-. This amount today would get you less than quarter of an Infosys share! Thus it would be affordable for an investor to build a portfolio of investments through a mutual fund rather than investing directly in the stock market.
B. Bank Fixed deposits v/s mutual fund:
Bank Fixed deposits are similar to company fixed deposits excepting that the Bank FD’s are more safe and chances of default are very less. Banks operate under stringent requirements regarding Statutory Liquidity Ration (SLR) and Cash Reserve Ratio (CRR). Further, Deposit Insurance and Credit Guarantee Corporation (DICGC) protect bank deposits.
C. Bonds and Debentures v/s Mutual fund:
Credit rating of a bond is an indication of the inherent default risk in the investment. However unlike fixed deposits, bonds and debentures are transferable securities. If security does not get traded in the market, then the liquidity remains on paper. In this respect an open-end mutual fund scheme offering continuous sale / repurchase option is superior. There could be capital gain / capital loss to investor incase of an early exit, because the investment is subject to market risk. This is normally less in Mutual fund as the investment is made in basket of funds and hence your investment gets diversified.
D. Equity v/s Mutual fund:
It is not possible for a common man to lay his hands on all that information needed to make an equity investment. Mutual fund handled by professionals make prudent investment decisions. Mutual fund investment offers diversification irrespective of the size of investment. Individual investor investing in equity scheme may not have this advantage especially if he does not have that sort of investible funds.
E. Life insurance v/s Mutual Fund:
Life insurance is hedge against risk – and not really an investment option. But occasionally, on account of mis-pricing of products in India, life insurance products have offered a return that is higher than a comparable “safe” fixed return security – thus, you are effectively paid for getting insured.

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Varun (none) (379 Points)
Replied 12 December 2014

Bro...i dunno about above mutual funds...

But SBI MFs are equally great...try it!!

jatin aswani (ARTICLE ASSISTANT) (102 Points)
Replied 12 December 2014

Risk is defined by mutual funds themselves ..if u study them...its good for investment.... Best for small investors...Equity oriented funds are more risky than debt....

shikhar (LEARNER ) (1394 Points)
Replied 12 December 2014

Hello, friend i track 3rd and 4th funds mension above, both are good.

But i personaly suggest you to invest in interest sencetive sectore such as Bank, fiance sector etc,(by mutual fund or direct investment in shares) because now interest rate are going reduce , which will help these sectore alot. year 2015 will be year for interest sencetive sector.

Thanks

Sumit K (student) (40 Points)
Replied 12 December 2014

While investing in mutual funds, always think of long term wealth accumulation. Only Equity exposure will make a large corpus in long term. Mutual fund are the best way to invest for new investor, start with a small amount of monthly, quarterly SIP's as suitable to you. First time investor should always go for diversified fund as one should not lay all his eggs in one basket. A good mutual funds scheme is that which is good for you or which suits your risk appetite. The first one mentioned by you is a sector fund, go for it of you are very particular about it. You should see their past performance and past track record from www.money control.com I am repeating "" always go for long term horizon"" due to power of compounding you will generate a handsome corpus.