Our story intended to provide the readers with an overview of the debt fund categories to invest in over different time frames, and the returns one can expect from these. While we did not list specific funds, we regularly carry the top performing funds across various categories in the Mutual Fund Monitor (page 90). We agree that the exit of brokers and agents has created a vacuum in the distribution business. However, Money Today regularly provides information on various types of funds, which you can access at www.moneytoday.in.
I have been investing in Birla Frontline Equity Fund for the past three years. I now want to sell the fund. Should I redeem all the units and withdraw the money as a lump sum or is it better to do it in a staggered manner?
Sandeep Kumar, Amritsar
The answer depends on the reasons for selling the fund. If you are withdrawing to buy an asset (car, house, etc) it should be done at one go. However, if you are taking out the money to supplement your income or meet recurring expenses, go for a systematic withdrawal plan (SWP). An SWP is the reverse of an SIP, wherein a predetermined amount is redeemed and paid to the investor in regular instalments.
The story on metasearch engines (Spread the Net for a Wider Choice, April 2010) was very informative. But can these portals guarantee realtime results? What if I click on a deal only to find that the partnering travel agent no longer offers the stated price?
Shankar Moorthy, Kochi
Most meta portals work in real time, so barring a rare dead link, you are unlikely to face this problem. If you have signed up for the e-mail alert facility, you will be informed regularly about discounts, etc, but in the world of online travel booking, good deals and cheap fares sell fast. Between the time you get an e-mail alert and conduct your search, things might change. This is a risk you will have to take to be in the loop.
In the latest edition of Portfolio Doctor (Balancing Risk and Reward, April 2010), you have advised Shankar Suman to exit his only stock holding, Reliance Power, because it is of very little value, about Rs 3,500. Why have you discouraged him from doing so?
Gagan Sisodia, Raipur
If you have a very small portfolio, the transaction cost is a chunky proportion of the investment. For instance, Suman may be paying about Rs 500 as demat charges, which will eat into the net returns. Also, as the principal investment is small, its impact on the financial plan is minimal, though the investor has to take a very high risk for it.
