Thursday, November 2, 2006

Mutual fund selections

I have selected four Mutual Fund schemes out of the 600 odd MF schemes in the country. Infact it was motivated in parts by reading Value Research, by the booklet AMFI promptly sent to me, by my friend and the attractive returns being posted by the MFs.

I have gone for the "Diversified Equity" and one "hybrid" MFs with aggressive growth targets and my selections are as under: SBI Magnum Global, HDFC Prudence Growth, Sundaram Select and Reliance Vision. I have taken the SIP route to even out the market volatility and have opted for four different dates in a month for the SIP to be debited. I will be investing Rs X for the next 12 months and then review my MF decision.

SBI Magnum Global was launched in 1994 and has given an impressive performance of approx. 100% growth over last one year. The returns % age since launch is 16%. It is an aggressive equity fund and aims at moving from one hot area to another nimbly and staying where the quickest growth lies.

Sanjay Sinha is the fund manager. Value research MFI has to say the following for the fund: This fund has been the greatest beneficiary of the mid cap rally. Be ready to take a lot of risk here. Don't be surprised if you get only small and mid cap stocks in your portfolio.

Though the NAV of the fund is Rs 38.83, the purchase price for me was Rs 39.70. So for the Rs 10000 I invested I was given 251.889 units and the market value stands at Rs 9780.85. So Rs 219.15 goes into my entry load, the amount I pay them upfront for managing my funds.

Time for the fund managers to take over and really deserve that money(load for me, carrot for them). I wish them luck, though it's in my own self interest!

The other three funds will be reviewed one by one later.
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