BENGALURU: As the elders say, if you want to live your future to the full, you have to invest in your present! But investing is not such an easy thing to do. While FDs are termed as easy, mutual funds is an investment option for which everyone has some query about. Below are some of the queries and their answers given by Shilpa Wagh, Chief Wealth Coach, Wagh Financials to The Economic Times.

Question by B B Swain (Retired): I would like to invest in Debt fund with my medium term goal of 5-6 years. Kindly suggest few funds to spread the investment for expected best return.

Answer: There are mostly two top concerns for a retired person trying to invest. One is the generation of regular cash flow and the second is to protect the invested capital. Most Debt funds are ideal for 5-6 year time horizon, and have moderate risk pattern. HDFC High Interest Fund - Dynamic Plan and Birla Sun Life Short Term are two Opportunities Funds (OFs) that have no equity exposure in their portfolio, and are pure debt funds. Over the past few years, these OFs have generated 9-10 percent returns.

ICICI Pru MIP 25, Birla Sun Life MIP II -Wealth 25 Plan can be considered, if the investor is ready to take moderate equity exposure in debt funds which accounts to 25 to 30 percent. More aggressive equity exposure can be thought through funds like Tata Balanced Fund, SBI Magnum Balanced which will have 65% or more exposure in equity to give the investor growth and 35% or less in Debt instruments to provide protection.

Question by Suyash Goel (Student): I have a FD of 50000 and idle funds of 250000. I also have monthly saving of 2000-3000 from my stipend. I want to invest my savings in both forms one time investment and recurring investment. What are the best options for me?

Answer: The investment time horizon must be decided first for which you can stay invested, before deciding on investment instrument. If the horizon is more than 7-8 years, then the equity exposure can be aggressive. Mid-cap or multi-cap funds with higher risk but better performance can be considered for this as you go over the years.

Some of the good performing funds in this sector are HDFC Mid-cap opportunities, Mirae emerging blue-chip fund, and Franklin India prima fund. For long term investments in these funds, SIPs can be considered. ICICI Prudential Focused Blue chip, BSL Frontline equity are measured to be good funds to invest in when considering little aggressive large cap funds. For investing lump sum amount you can consider large-cap or balanced funds like tata balanced for time horizon of 5-6 years. For time horizon less than that consider ultra short/short term funds like HDFC Short Term opportunities fund, SBI Short term funds, BSL Short term funds can be considered.

Question by Nitin Mane (Long term investor): I have SIP of Rs 3000/ - in 3 MFs since last 4-5 years, DSPBR TOP 100 Equity, HDFC Top 200G, and IDFC Premier Equity Growth. The rating of above three MFs has come down. Shall I continue further SIPs or Stop? In case I stop further SIPs, in which MFs shall I start my SIPs?

Answer: Rating is one of the many performance parameters on which a mutual fund is considered upon. AUM, Adherence to investment strategy by fund manager, fund manager tenure, volatility vs. performance and some other ratios are other parameters that can be considered for judging the MFs. These parameters are needed to be verified before the decision is made to stop these SIPs.

Two large caps and one mid cap fund are included in the above mentioned question. Multi-caps like ICICI Prudential Value Discovery, Franklin India High Growth Companies, SBI Bluechip can be considered as alternative funds to these.

Read Also: Indirect Tax Collection Up 30 pct In June Quarter Against last FY

Raghuram Rajan Asks Banks To Tap CASA Deposits For Project Financing