This is an email from a friend / reader ….

His name: Rajendra Shah:

Hi Subra,

A few years ago when I asked you where to invest you suggested Hdfc Prudence fund. To be precise this was in the year 2005. Now 5 years later again you are telling me to invest in Hdfc Prudence and about 15 days before…you again asked me to top up ….

About 6-7 months back I was watching a TV Program where they asked a client to invest in balanced funds from various houses – Templeton, Icici, in some opportunities fund like L&T, one gold ETF, Sundaram Paribas, ….7 fund houses and as many schemes.

Now suddenly another channel has made changes and asked the investor to shift to Prudence.

I did not understand what is happening – can you please explain?

Answer:

I have said this earlier and am repeating it. For a website to choose only one scheme makes NO sense at all. Websites, magazines and television channels are dependent on advertisements. Even rating channels are dependent on advertisements

So if you are running a mag, a channel and/ or a website you need to have a relationship with 40 fund houses (another 23 to come) you need to recommend a long portfolio. Some mutual funds are good spenders so you have to include them in your recommendation list. It is not necessary to recommend the top performing funds – because the mutual fund house will itself advertise. So if you do shuffle the portfolio 2-3 times in a year you would have covered all the houses – if not all the schemes. Yesterday I got a mailer from a big aggregator – he tries to get a higher commission from the asset management companies. He has sent a “best funds in which to do a SIP” – fairly obviously it does not include Templeton and Hdfc – both who do not pay extra brokerage to such aggregators. He has included a scheme which has given 11% over the past 5 years. Makes no sense for you and me because we have RM as the broker who has got us 79% last year in equity markets – when the markets did 29%.

Also imagine can you run a mag, channel or a website saying invest in Hdfc Top 200, Hdfc prudence, Franklin India BlueChip, Icici Pru Dynamic, Templeton India Pension Plan and one Liquid fund?

It will be a dull and boring article and people will not re visit your site or your channel.

However if you had done a SIP (like you have) in these funds – over the last 7-8 years frankly you should have no regrets….s0 please watch animal planet.