I invested Rs.17 lakh as a lump sum in SBI Automotive Fund in May 2024. Please evaluate this fund, and is it suitable for holding long[1]term? – Gopal K, Telangana
Currently, sector and thematic funds fall outside our regular analysis and recommendation framework, but we can provide some general guidance. When considering such investments, we recommend being highly selective with sector/thematic allocations, basing decisions on your outlook regarding that sector’s growth prospects. It is also prudent to maintain these single[1]sector or thematic investments at a reasonable proportion of your overall portfolio.
What investment plan would you recommend for my two-year-old son? – Sangeetha N, Trichy
The optimal investment strategy depends on your investment horizon and risk tolerance. For a long-term horizon of 15+ years, equity mutual funds present a viable option. Consider starting with systematic investments in mutual funds in Flexicap or Multicap funds, which offer broad market exposure and professional management.
As a businessman, I maintain over Rs. 15 lakh in my current account, earning no interest. Could liquid funds provide better returns? What are their limitations, and which funds would you recommend? – Revikumar, Bengaluru
Liquid funds are debt category mutual funds that invest in very short-duration debt and money market securities. These funds typically offer lower volatility compared to longer-tenure debt funds, making them suitable for parking surplus funds for short periods. While returns tend to be modest, they generally outperform bank deposits when considering liquidity advantages. For your consideration, we recommend the following liquid funds:
• Axis Liquid Fund
• Canara Robeco Liquid Fund
These funds offer a balance of safety, liquidity, and reasonable returns for short-term surplus fund management.
I’m 30 years old and have been investing Rs. 2,000 each in three funds (Kotak Emerging Equity Fund, SBI Magnum Mid Cap Fund, and SBI Large & Midcap Fund) for the past three years. I now have an additional amount of Rs. 3,000 to invest monthly. Should I increase my existing investments or start a new one? Which funds would you recommend? – Sudha P, Nagpur
Given below our rating of the schemes . A 5-star rating means best in the category and 1 star is the least preferred for keeping the scheme in a portfolio. The funds which are currently in 5 star and 4-star category are good performing funds, and you can hold these funds. Your existing investments have a 3-star rating. We suggest monitoring their performance for the next six months and consider switching to a better-performing funds if there’s no improvement. Given these ratings, we recommend investing your additional Rs. 3,000 in a high-performing Flexicap category fund. HDFC Flexicap Fund (4 Star) would be worth considering.
