The Wealth Manager146;s Picks

Devang Shah8217;s Top ChoiceMumbai based Devang Shah works with Right Returns and is a CFP8482; practitioner holding the certification in ...

Devang Shah8217;s Top Choice
Mumbai based Devang Shah works with Right Returns and is a CFP8482; practitioner holding the certification in U.S.A. and India. Shah advocates a fee-only approach to help create a conflict free relationship. This is what he likes:

While I am going to zero down on some investment and insurance products, our belief lies in the efficiency of markets. In other words, if a investment manager is not a rogue, is transparent about his style and sticks to it, over a period his performance is very likely to be similar to that of his peers who have similar attributes in terms of honesty, style and asset class. Which means that you need to choose your asset class, that is, equity 8211; large, medium, small cap, debt and so on 8211; choose the appropriate style of investing value, momentum, core and then hunt for a few fund managers who are faithful to their asset classes and are creditable. Between such fund managers the choice may simply be made by throwing darts because out-performance is very likely to be a matter of pure chance.

If you do not have an advisor and I mean a true advisor, not a financial product sales agent it may be better to stick to plain products in equity and debt rather than hybrid products such as multi-cap, dynamic, balanced, MIPs and asset allocation funds.

Equity
We very firmly believe that an investment in equity needs a time frame of seven to 10 years. Anything less than that is clearly a gamble. Given this background, here goes a list of equity funds:

HDFC Equity Fund
Templeton India Growth Fund
HDFC Tax Saver ELSS
HSBC Equity Fund
HDFC Growth Fund
Franklin India Prima Fund

Largely equity but useful for education funding-

Prudential ICICI Child Care Plan 8211; Gift Plan
HDFC Children8217;s Gift Fund 8211; Investment Plan

Debt
Relatively speaking, debt investment requires a smaller time frame. Beyond a five year time frame which debt mutual fund you choose becomes irrelevant subject to the earlier issues of fund manager being honest and so on and debt also becomes a sub-optimal asset class for saving. Here is a list of lowest risk-return-time frame debt mutual fund schemes:
Templeton Floating Rate Income Fund
HDFC Floating Rate Fund
Grindlays Floating Rate Fund
Next in line is plain vanilla income funds where you need to have a three year time frame
DSP Merrill Lynch Bond Fund
HDFC Income Fund
Templeton India Income Fund
Government securities funds are best avoided at this point in time. The RBI bonds and post office schemes can provide stability to a debt portfolio.

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Insurance
We are do not believe in the efficiency of unit linked insurance schemes and do not recommend them to our clients. Plain term insurance should be used to protect one8217;s saving ability till the retirement amount is saved up. ICICI Prudential, HDFC Standard and Birla Sunlife are some of the companies offering competitive rates for Term cover.

We also find that endowment plans, money back policies, whole life plans are usually suboptimal solutions and alternative and better methods of achieving the same results are available. So unless you have a competent and independent advisor who believes these might be useful for you, it is best to stay away.

Disclosure: We are not agents to any insurance company. We are empanelled with most mutual fund companies and may recieve commissions on transactions implemented by us.