Resource id #4Resource id #4 Advisor Interview
28 March, 2023 12:01 IST

`Rebalance your portfoilo to balance & hybrid funds`

Source: IRIS (10 February 2011)

`Rebalance your portfoilo to balance & hybrid funds`
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In an interview with Yogita Khatri of, Mallesh Patur, Certified Financial Planner (CFP), Vin Investments says, ``Retail participation in mutual funds has been declining mainly due to lack of interest from mutual funds distributors as it has become unviable to sustain, unless you are dealing with HNI clients.``

> Could you please tell us about Vin Investments? When did you begin journey in the financial services industry and how has the journey been so far?

Vin Investments is proprietor based firm, providing vast basket of financial services under one roof, with excellent infrastructure and client service. I joined Vin Investments as a financial planner; we provide financial solutions to clients and also handle mutual funds and general insurance services. We prepare financial plans and recommend right mix of asset allocation with products to be utilized. The journey has been quite satisfying till now.

> How do you reach out to your clients? Are clients clear in their goals? What steps do you take to bring clarity to their goals?

We have good number of clients for all categories of services, maximum product based. Some clients are product specific; some give their complete portfolio for management. We get clients through referrals, pamphlet distribution. We discuss with the client and give him sample financial projections of some of the common goals and let the client think over and come back. Actually, clients are clear of goals, but not clear in terms of financial terms, i.e. cost of goal, we help them in quantifying the goals in money terms.

> With the markets correcting from the month of January, what kind of portfolio rebalancing should a retail investor look at now?

We would vouch for portfolio comprising major shift to balance & hybrid funds. We would recommend to park funds in floater liquid funds and give STP instructions into equities etc, as per risk profile. As most of the clients are long term investors, we recommend buy and hold strategy. Our suggestion, as always, would be - SIP in equities and hybrid balance funds with long duration.

> Retail participation in mutual funds, especially in the equity-oriented schemes, has been declining. What are the primary reasons for retail investors staying away from mutual funds? How do you see the trend going ahead?

Major factor is lack of interest from mutual funds distributors as it has become unviable to sustain, unless you are dealing with HNI clients having large portfolio. So far, clients have been habitual of getting free advice; they are reluctant to pay fees. It will take considerable time and consistent efforts to educate client about quality advice. Also, with market volatility and new scams and negative market mood, the logic of strategic asset allocation i.e. buy on low and sell on high is not working. Also, a distributor is not able to tell for long term investors as we are not confident of market stability and government.

> Equity-linked Savings Schemes (ELSSs) are the best initiators for investments in mutual funds but after the Direct Taxes Code (DTC) they will become irrelevant. How is it going to impact the industry? Please share your thoughts with us on same.

I feel we are going back to past, where fixed returns were the norms; it is certainly going to impact mutual fund industry as a whole. I believe finance minister (FM) will re-work on it. Government is thinking future about financial security of our nationals, that`s good as we are poor in planning our retirement provisions. ELSS could be modified and re-launched if government wants.

> How do you see various debt instruments performing given the volatile markets and rising interest rates?

Debt instruments are somewhat safer than equities. For new investor it is advisable to invest in floater funds and give STP instructions.

> How many life insurance companies do you deal with? How much is the whole insurance business in your total?

We deal with Life Insurance Corporation of India (LIC). Company`s proprietor Nitin J. Popat is consistent Million Dollar Round Table (MDRT) member and well reputed.

> How many fund houses do you deal with? In which fund house do you have the maximum AUM (in terms of percentage)? Tell us your favorite all-time MF schemes and fund managers.

We deal with major AMCs and have no bias or favors to particular fund houses, we work based on performance. My all time favorite MF schemes (my individual opinion) are:
# Franklin India Bluechip/Prima Fund
# Birla Sunlife Basic Fund/Birla Sunlife Equity Fund
# HDFC Equity Fund/HDFC Prudence Fund
# DSP Tiger/Top 100
# Tata P/E Fund, Tata Equity Opportunities Fund
# Reliance Vision Fund/Reliance Growth Fund
# Sundaram Midcap
# ICICI Dynamic Fund

> What are the aspects that matter to you when selecting funds for your clients? Your top 3 equity fund picks and debt fund picks with key attributes you like in them?

The factors that matter most while selecting funds are: Investment objective, last 3 years` return, portfolio holdings, ratios, fund house reputation. Top 3 equity fund picks are Franklin India Bluechip, HDFC Top 200 and Birla Basic Fund on the back of consistent performance and continuity of fund manager. In debt category, top 3 funds are Templeton India Income Fund, Birla sunlife Gsec, Ipru Flexi on account of stable performance.

> Is there anything else you would like to share with our readers?

Financial planning is the best way to plan all your financial goals and investment planning. Blindly investing as any advice freely available may work against the very real purpose of investing. It is always recommended to consult certified financial planner for getting right advice.

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