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Which Fund To Buy guide
Which Fund to Buy guide
Bharosa Club is a Registered Investment Advisor with SEBI (RIA # INA100004657).
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Edition : 3 (part 1 of 2)
Disclaimer:1. Mutual Fund Investments are subject to market risks, read all
scheme related documents carefully.2. Past performance does not guarantee future returns.
Publication Date : 23 December, 2016Validity : Till June 30, 2017Data Source : ACE MFV2 Accord
Fintech Pvt. Ltd.
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The most unbiased guide for building a mutual fund portfolio
“When your earnings depend upon customer fees rather than
commissions; you have no option but to give great advice”
For great advice, understand your goals, investment horizon and risk profile
Rigorous Analysis & a Simple Approach are key to great investing
Great Advice can be made affordable if it can be delivered to many
3
Message from the Chief Investment Officer
B.Tech( IIT - Mumbai)PGDM ( IIM - Ahmedabad)Head Equity Derivative Operations, Citibank New York, Reuters Digital Vision Fellow, Stanford University, PayPal founding teamNISM Investment Advisor (Level I&II)
Sanjay BhargavaCEO & CIO, Bharosa Club
Dear Member,
The 3rd edition of our guide is very special because it marks a monumental change in our approach toadvice. Investors have two questions: 1) Which funds should ‘I’ invest in & 2) How much returnsshould I expect?
Given that no two investors are alike, we have created model portfolios for different kinds of investorsbased on their risk profile, investment horizon & goals. An investor can simply select any of our 4model portfolios and quickly get started on their investment journey.
The second question is trickier because mutual fund returns are not guaranteed. Nonetheless we havetried to address this question as well. Each model portfolio is accompanied by a range of returns thatan investor can expect with a 10 year investment horizon. We have been conservative in indicatingexpected returns. However we want to explicitly state that returns from mutual funds are notguaranteed.
The last six months have been very exciting for investors. Equity markets have been volatile and so hasthe Debt market. I encourage you to not get bothered by short term volatility and stay the course.Nothing pays off in investing like persistence.
The last six months have also been exciting for Bharosa. We have doubled our member base and todayadvice on assets over Rs. 200cr. We have launched a series of firsts – Free Portfolio Check, Instant SIP,& Market Linked Investing. And the coming months have more in store.
We would love to get your feedback on this guide as well as on the features and services offered byBharosa. With that, all the best & Happy Investing!
How to use this guide
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STEP 1: Determine your Investment Strategy 5
STEP 2: Study your Model Portfolio 7-12
13STEP 3: Get Started
Page
Refer to Part 2 of the guide for
How we picked our funds
The BHAROSA 25 14
A comprehensive list of the top funds across categories
STEP 1: DETERMINE YOUR INVESTMENT STRATEGY
5
Select an Investment Strategy based on your goals, investment horizon and risk profile. Return
expectations will depend upon risk taken.
9%
10.20%
12.60%13.80%
6%7.20%
9.60%10.80%
Choose your Risk Profile
• If you can’t tolerate any volatility in returns
• If you have very short term goals
• If you want regular income out of all your investments
RISK AVERSE
• If you can handle slight volatility but not large losses in the short term
• If you want to beat post tax FD returns
• If your investment horizon is less than 5 years
CONSERVATIVE
• If you can handle risk and digest large losses in the short term
• If you want to get higher returns
• If you want to invest for 5 years or more
MODERATE
• If you are a risk taker and can handle losses over the medium term
• If you want to create wealth
• If you have an investment horizon of 10 years or more
AGGRESSIVE
Pick 1 strategy which suits your investment style
* Assuming Debt returns range from 6-9%, Equity 12-15% per annum. Note: The expected range of returns are for a 10 year investment horizon
0% Equity : 100% Debt 20% Equity : 80% Debt 60% Equity : 40% Debt 80% Equity : 20% Debt
10 year Expected Range
of Returns*
6
STEP 2: STUDY YOUR MODEL PORTFOLIO
7
Use the Model Portfolios as a guide. You have complete flexibility to 1. Increase or decrease diversification/# of funds (Not for Basic Plan)2. Change allocation in funds3. Look at alternate funds (Not for Basic Plan)
Study the Model Portfolio for your selected strategy.
You can reach us at +91 9313137373 for clarifications
Model Portfolios: PAID PLANS Investor Profile – RISK AVERSE
Portfolio Allocation
Category % Allocation
Ultra Short Term Debt20%
Short Term Debt
20%
Equity: 0%, Debt: 100%
Role in Portfolio
Liquidity for short term. Post tax FD like returns.
Potentially provide higher than post tax FD returns
10 yr Returns Range (expected) 6% - 9%
.
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20%
20%
20%
Recommended Funds
Reliance Money Manager Fund
Birla SL Treasury Optimizer Plan
Birla SL Savings Fund
Birla SL ST Opportunities Fund
ICICI Pru Short Term Plan
We don’t recommend other types of Debt Funds (Income, Gilt, Dynamic) as they carry higher interest rate risk
Model Portfolios: PAID PLANS Investor Profile – CONSERVATIVE
Category % AllocationRole in Portfolio
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Recommended Funds
Portfolio Allocation Equity: 20%, Debt: 80% 10 yr Returns Range (expected) 7.2% - 10.2%
Equity - Large Cap
Equity – Multi Cap
Wealth Creation. Provide stability to an equity portfolio
Wealth Creation. A good mix of stability & returns
Ultra Short Term Debt20%
20%Liquidity for short term. Post tax FD like returns.
10%
10%
Short Term Debt Potentially provide higher than post tax FD returns20%
20%
ICICI Pru Top 100 Fund
Reliance Money Manager Fund
Birla SL Savings Fund
Motilal Oswal MOSt Focused Multicap 35 Fund
Birla SL Treasury Optimizer Plan
Birla SL ST Opportunities Fund
We don’t recommend other types of Debt Funds, Please see our comments in the risk averse model portfolio. Conservative Investors should restrict themselves to Large Cap & Multi Cap Funds for less
volatility.
Model Portfolios: PAID PLANS Investor Profile – MODERATE
Category % AllocationRole in PortfolioRecommended Funds
Portfolio Allocation Equity: 60%, Debt: 40% 10 yr Returns Range (expected) 9.6% - 12.6%
Equity - Large Cap Wealth Creation. Provide stability to an equity portfolio
Ultra Short Term Debt 20%Liquidity for short term. Post tax FD like returns.
15%
10%
Short Term Debt Potentially provide higher than post tax FD returns 20%
ICICI Pru Top 100 Fund
Reliance Money Manager Fund
Birla SL Advantage Fund
Birla SL Treasury Optimizer Plan
Equity – Multi Cap Wealth Creation. A good mix of stability & returns 15%
10%
Motilal Oswal MOSt Focused Multicap 35 Fund
L&T India Value Fund
Equity – Mid Cap Wealth Creation. Volatile but potentially higher returns 10%HDFC Mid-Cap Opportunities Fund
We avoid recommending Sectoral & Thematic Equity funds as they are risky. We also don’t recommend Hybrid or Balanced Funds, as we feel
the model portfolios help in self creating the balance.
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Model Portfolios: PAID PLANS Investor Profile – AGGRESSIVE
Category % AllocationRole in Portfolio
We avoid recommending Sectoral & Thematic Equity funds as they are risky. We also don’t recommend Hybrid or Balanced Funds, as we feel
the model portfolios help in self creating the balance.
11
Recommended Funds
Portfolio Allocation Equity: 80%, Debt: 20% 10 yr Returns Range (expected) 10.8% - 13.8%
Equity - Large Cap Wealth Creation. Provide stability to an equity portfolio
10%
15%
15%
ICICI Pru Top 100 Fund
DSPBR Micro-Cap Fund
Motilal Oswal MOSt Focused Multicap 35 FundEquity – Multi Cap Wealth Creation. A good mix of stability & returns
15%
10%
HDFC Mid-Cap Opportunities Fund
DSPBR Small & Mid Cap FundEquity – Mid Cap Wealth Creation. Volatile but potentially higher returns
15%L&T India Value Fund
Equity – Small Cap Wealth Creation. High Risk High Return
Ultra Short Term Debt 20%Liquidity for short term. Post tax FD like returns.Reliance Money Manager Fund
Model Portfolios: BASIC PLAN (Free)
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RISK AVERSE
0
100%
Recommended Funds
ICICI Pru Top 100 Fund
Reliance Money Manager Fund
CONSERVATIVE
20%
80%
MODERATE
60%
40%
AGGRESSIVE
80%
20%
DSPBR Tax Saver Fund If you want to invest for Tax Saving
13
Start investing for FREEBASIC PLAN
For existing MF InvestorsPREMIUM PLAN (Rs. 150/m)
For Serious MF InvestorsPRO PLAN (Rs. 1000/m)
Invest in the 3 Top Picks
Set SIPs
Use the Model Portfolios
Customize your Portfolio as you need
Set Instant SIPs
Set Variable SIPs
Set Switch, STP, SWP
Make the most of market volatility with Market Linked Investing
Get Assistance in Portfolio Migration from Regular to Direct funds,
from closed ended to open ended funds, from poor performing to top fund picks
STEP 3: GET STARTED
Complete Profile. Submit Documents. Start.
THE BHAROSA 25
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You can swap any of the funds in your model portfolio with one from our Top Picks. You can
also pick any other fund not in our list.
The Bharosa
25
THE BHAROSA 25
15
Category Fund
Equity Large Cap
ICICI Pru Top 100
Birla SL Advantage
HDFC Top 200
Reliance Growth
DSPBR Equity
Equity Multi Cap
L&T India Value
Birla SL Equity
Motilal Oswal MOSt Focused Multicap 35
Equity Mid Cap
HDFC Mid-Cap Opportunities
DSPBR Small & Mid Cap
Sundaram Select Midcap
Equity Small CapDSPBR Micro-Cap
Reliance Small Cap
Category Fund
Debt – Ultra Short Term
Birla SL Savings
ICICI Pru Flexible Income Plan
Reliance Money Manager
Debt – Short Term
Birla SL Treasury Optimizer Plan
Birla SL ST Opportunities
ICICI Pru Short Term Plan
Birla SL Short Term Fund
Arbitrage ICICI Pru Equity-Arbitrage
HDFC Arbitrage-WP
Tax Saver
DSPBR Tax Saver
HDFC TaxSaver
HDFC Long Term Adv
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T: +91 9313137373E: [email protected]