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Choosing a fund is the next step. There are many fund houses like ICICI prudential, Kotak, DSP Merill Lynch, Reliance, SBI etc and one has innumerable options in type of funds to confuse you. They are mainly equity funds, debt funds, balanced funds. Equity Linked Savings Scheme (ELSS) is a good option for those who want to save tax. There are many factors to consider before investing. This is just beginners basic. For long term investors equity funds would be ideal. There are many research sites that give study, comparison and annualized return for funds with ratings. The one I refer regularly is www.valueresearchonline.com ; this site gives complete details of mutual funds with rating and performance of the fund.
As of now most funds would show negative growth due to market freefall. I usually spread my risk over 2 to 3 funds in the form of SIP. I have stay put in following funds Reliance Growth Fund, HDFC Taxsaver, HDFC top 200, Templeton Prima fund, Templeton Bluechip fund etc. It is not necessary to follow same funds, please have a detailed discussion with a financial advisor before investing in mutual funds. Find below performance of some funds since launch.
| Open Ended - Equity (Since Launch Return) | |||
| Funds | NAV (Date) | Returns(%) | Return as on |
| Reliance Diversified Power Sector Retail | 40.89 (22-Dec) | 35.02 | 12/22/2008 |
| HSBC Equity | 60.14 (22-Dec) | 34.47 | 12/22/2008 |
| Tata Equity Opportunities | 40.48 (22-Dec) | 34.06 | 12/22/2008 |
| Sundaram BNP Paribas Select Midcap Reg | 62.95 (22-Dec) | 33.11 | 12/22/2008 |
| DSPBR Top 100 Equity Reg | 51.85 (22-Dec) | 32.56 | 12/22/2008 |
| HDFC Taxsaver | 100.38 (22-Dec) | 31.58 | 12/22/2008 |
| ICICI Prudential Dynamic | 51.13 (22-Dec) | 30.20 | 12/22/2008 |
| Sundaram BNP Paribas Select Focus Reg | 51.98 (22-Dec) | 29.20 | 12/22/2008 |
| Birla Sun Life Tax Relief 96 | 45.78 (22-Dec) | 29.07 | 12/22/2008 |
| Reliance Banking Retail | 41.22 (22-Dec) | 28.82 | 12/22/2008 |
Again there are options to choose from either growth or dividend. Growth option – here net asset value (NAV) grows and no dividends are declared, dividend option - here dividends are declared frequently – the NAV comes down when dividends are declared. Dividend can be either reinvested or withdrawn. Incase of one time investments one can choose growth or dividend reinvestment option, if you are old and are looking some amount for expenses choose dividend option. Same holds good for SIP investors.
ELSS investors caution while you choose option – a strict no to reinvestment option –as small amounts would be locked for 3 years again….so it has to be growth or dividend payout option....
