ELSS Mutual Fund Suggestions

magnet

Active member
#1
My father doesn't make any investment decision and I have been making decisions on his behalf. He is so lazy that he is not ready to open a PPF account and hence the only investment left in 80C left to invest on his behalf is ELSS.

Though I delayed till jan 2014 that he will open PPF account but I finally gave up.

I have already decided 4-5 MF and already started investing in it directly and so far 10% job done(10k invested).(0% remaining).

But last night I check value-research on the folio investment and I found most of the good rating funds are overlapping their investment in stocks like TCS,Sun pharma,Infosys,HDFC bank or some very high PE companies.

The funds I have decided and invested so far is as follow(All Direct plans).
1::ICICI Prudential Tax gain
2::Quantum Tax savings fund
3::Franklin Templeton taxshield fund
4::Axis long term equity

Also i was having a look a Religare invesco ,Hdfc long term advantage and canara robecco out of which at max 2 I will choose.

But now seeing their folio I see they just overlaps.

Should I stick with this 4 or I increase my basket for better diversification?
 
#2
Star Ratings are not the best way to pick any fund. These are quantitative, and only reflect a part of the past, looked at from a certain angle. To pick a fund, in my opinion, one should start with a qualitative analysis. Morningstar, in addition to its star ratings, also offers qualitative ratings that are called 'Analyst Ratings.' This, in my understanding, is the easiest accessible qualitative analysis of funds in India.

Once you have shortlisted a few funds based on that, you could consider diversification across 3-5 fund houses which, in my opinion, should be adequate.

For funds not covered in Morningstar's analysis, there is no easy way for performing qualitative analysis. Familiarity with the fund managers, their experiences, style and preferences, along with the processes followed is essential to do such an analysis.

Interpreting portfolio holdings in a fund can be a tricky thing. The portfolio reflects what a fund holds on a given date. What is not known is why are these there, and what does the fund manager/ team propose to do with these.

Morningstar's qualitative analysis, as far as I understand, does examine the thinking of a fund manager/ team and therefore factors in the 'why' of portfolio holdings in its final verdict.
 
#3
My father doesn't make any investment decision and I have been making decisions on his behalf. He is so lazy that he is not ready to open a PPF account and hence the only investment left in 80C left to invest on his behalf is ELSS.

Though I delayed till jan 2014 that he will open PPF account but I finally gave up.

I have already decided 4-5 MF and already started investing in it directly and so far 10% job done(10k invested).(0% remaining).

But last night I check value-research on the folio investment and I found most of the good rating funds are overlapping their investment in stocks like TCS,Sun pharma,Infosys,HDFC bank or some very high PE companies.

The funds I have decided and invested so far is as follow(All Direct plans).
1::ICICI Prudential Tax gain
2::Quantum Tax savings fund
3::Franklin Templeton taxshield fund
4::Axis long term equity

Also i was having a look a Religare invesco ,Hdfc long term advantage and canara robecco out of which at max 2 I will choose.

But now seeing their folio I see they just overlaps.

Should I stick with this 4 or I increase my basket for better diversification?
Split the total amount between 2 funds.

ICICI Pru Tax Gain and HDFC Tax Saver. That would do for this year.
 

magnet

Active member
#5
Star Ratings are not the best way to pick any fund. These are quantitative, and only reflect a part of the past, looked at from a certain angle. To pick a fund, in my opinion, one should start with a qualitative analysis. Morningstar, in addition to its star ratings, also offers qualitative ratings that are called 'Analyst Ratings.' This, in my understanding, is the easiest accessible qualitative analysis of funds in India.

Once you have shortlisted a few funds based on that, you could consider diversification across 3-5 fund houses which, in my opinion, should be adequate.

For funds not covered in Morningstar's analysis, there is no easy way for performing qualitative analysis. Familiarity with the fund managers, their experiences, style and preferences, along with the processes followed is essential to do such an analysis.

Interpreting portfolio holdings in a fund can be a tricky thing. The portfolio reflects what a fund holds on a given date. What is not known is why are these there, and what does the fund manager/ team propose to do with these.

Morningstar's qualitative analysis, as far as I understand, does examine the thinking of a fund manager/ team and therefore factors in the 'why' of portfolio holdings in its final verdict.
I did look at the site. But my problem was overlapping of shares at top 10 positions.Its almost like buying same shares in 3 different portfolio for long term hence diversification dies.Anyways thanks again and it looks 80-90% my analysis looks correct.

Split the total amount between 2 funds.

ICICI Pru Tax Gain and HDFC Tax Saver. That would do for this year.
I have already invest in these 4.This year i haven't invested in HDFC one as from last year they looks to be least performing one in the same folio.

Franklin and AXIS are new entry whereas ICICI and quantum are same in which i invested last year.

I found Reliance folio of stocks interesting but need to see why it didnt performed well in last couple of year.

What are "Direct Plans"?
Here you buy directly from company website rather than buying via agent say Fundsindia or broker. Hence expense ratio is less. In long term say 5-10 years down the line Direct plan will give some better return as less expense is deducted.

Also see here

Know all about investing in Mutual Funds Direct Plan - Moneycontrol.com
 
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