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.