which fund to buy guide which fund to buy guide

Which Fund To Buy guide

Which Fund to Buy guide

Bharosa Club is a Registered Investment Advisor with SEBI (RIA # INA100004657).

1

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.

2

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

4

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%

.

8

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

9

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


Birla SL Savings Fund

Motilal Oswal MOSt Focused Multicap 35 Fund


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


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%



Birla SL Advantage Fund


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.

10

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


Equity - Large Cap Wealth Creation. Provide stability to an equity portfolio

10%

15%

15%


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)

12

RISK AVERSE

0

100%

Recommended Funds



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

14

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 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

16

#566, 5th floor, Tower B-1,Spaze I-Tech Park, Sohna RoadSector 49,Gurgaon, Haryana- 01www.bharosaclub.com

T: +91 9313137373E: [email protected]