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September 1, 2013

Mutual Fund–Our Way

So the market is so volatile that even seasoned players also are not very sure where it is going. Every day is a new day. So does "Systematic Investment Plan" (SIP) works in this environment. Mostly people have monthly SIP but a month now appears to be a longish period and the advantage of SIPs that you average out and do not try to time the market does not work any more.
So how do we do it. We have done something of modified SIP in our own way. The way we went about it is as follows:
1. Selected following Mutual Funds:
  • BSL Dividend Yield Plus Direct-G

Franklin India Bluechip Direct-G

  • HDFC Equity Direct-G

  • HDFC Prudence Direct-G

  • ICICI Pru Focused Bluechip Equity Direct –G

  • IDFC Premier Equity Direct-G

  • Quantum Long Term Equity-G

  • UTI Opportunities Direct-G

    (Planning to add some debt funds in the same in future)
    Why because:
    • Highly rated as good performance record
    • From different fund houses thus risk is spread
    • Covers different categories – Large, Mid etc
    2. Now, we decided what is the total amount we want to invest in a month. Let us take around Rs 100000- so if we take around 20 days of market open days, it comes to Rs 5000- per day.
    3. Then we started investing Rs 5000- every day in these mutual funds by rotation. This ensures that we are buying market every day whereas at the same time we are rotating investment in these multiple funds.
    4. Attached excel sheet helps to track the investments.
    5. Created free account on Moneycontrol for the analysis of these investments.
    • Little high maintenance as we have to do investment every day. If by any chance miss a day, next day investment is doubled to cover that.
    • Since we had higher amount to invest every month, we could select more funds.

    Operational tips:
    • We are doing all these investment online directly on fund house sites so that we are able to invest in Direct plans thus saving on the commission getting paid to broker.
    • For the above, we have to submit a physical form first time to get folio created
    • There is some overhead on getting things enabled as in some cases PIN form is to be submitted as well.
    • We could not use SIP provided by fund houses as there are fix days and we do not like fixing by someone. However if you want to use, we have provided the possible SIP dates in the excel.
    (Will post more details if there is this post gets interest)

    1 comment:

    Prakashak said...

    Update: 08 Dec 2013
    We are doing this since 29th July and returns as of today (in absolute terms i.e. investment vs current value without taking into time factor into the account) are 9.05%. Impressive - Isn't it?

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