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‘Mutual Fund Investors Should First Identify Financial Goals:’ Value Research CEO

The first step for MF investors is to identify their financial goals, said Dhirendra Kumar, Founder and CEO (Chief Executive Officer) at Value Research, on BloombergQuint’s weekly series “The Mutual Fund Show.”

During the show, Kumar said that the investors should classify their investable surplus into three groups, which includes money for an emergency, money for short- to medium-term goals and money for long-term goals.

Kumar suggested investing in multi-cap, large-cap, and mid-cap funds, tax-saving funds, and value funds.

According to the Value Research’s CEO, long-term investors having restricted resources around 1.5 lakh Rupees should consider investing in tax-saving funds. Long-term investors having more than 1.5 lakh Rupees should try investing in large-cap and mid-cap mutual fund schemes, added Kumar.

Kumar also suggested that Hybrid-aggressive equity funds are the best for first-time MF investors. He also added that corporate bond funds are suitable for investors looking for a low-risk profile and medium-term investment. He further added that Equity income funds, balanced funds, and conservative hybrid funds are the best choice for investors, who are in search of a low-risk profile and long-term investment.

The Founder and CEO of Value Research also recommended investing emergency money in liquid funds and ultra-short duration funds.

When asked about the ideal fund choices for a person planning for retirement irrespective of the age, Kumar suggested starting with tax-saving funds in case of a taxpayer. He also added that such an investment experience will not be disappointing if the fund is continued for a holding period of three years.

After that, the person can continue Systematic Investment Plan (SIP) in diversified vehicles, he added further.

“Gaining diversity, getting convenience and being methodical is the key to success,” said Kumar.

He also added that SEBI’s reclassification can be very useful. Last year, the SEBI (Securities and Exchange Board of India) requested the MF houses to re-categorise their prevailing mutual fund schemes in order to avoid duplication and to simplify the choice for investors, reported Bloomberg.

[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]

Bindhu Mol. G loves writing news articles. She excels in SEO articles, technical articles and academic articles. She covers commodities and mutual fund news for OWLT Market.

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