I am 33, with an investment horizon of over 10 years. Could you tell me: (i) Which are the best fund houses for equity MF schemes? (ii) I plan to invest Rs 5-6 lakh in equity funds. Should I invest the amount in schemes managed by 2-3 fund houses. Will this reduce my risk? (iii) What are the costs I could incur? (iv) Which option should I go for growth or dividend, to maximise my returns?
Shrijesh S

HDFC Mutual Fund, Fidelity Mutual Fund and DSP BlackRock Mutual Fund are some of the fund houses whose equity funds have an impressive long-term track record across parameters. By investing in funds from different fund houses, you will be able to incorporate an element of diversification in your portfolio; this is certainly advisable. Investment management fees and other expenses are applicable to all funds. These are often displayed in fact sheets and other documents as a consolidated number the expense ratio. Also, in some cases, an exit load may be charged, depending on the tenure of the investment. Finally, growth and dividend are simply different options for investing in a fund, depending on the investors need for liquidity. Neither is better or worse off than the other when it comes to delivering returns.

I intend to invest in an MIP by transferring a fixed amount from my salary every month to the same. Please explain the procedure.
Deepak

I assume you are referring to making investment in a monthly income plan (MIP) by means of a direct debit from your salary account. Most fund houses offer the facility for investing via the systematic investment plan (SIP) route through a direct debit. After identifying the MIP, you should fill the auto debit/ECS form from the fund house. Also, you need to write a cheque for the first investment instalment. Subsequently, the fund house will debit your salary account every month in line with your instructions.

I hold 10,000 units of Tata Indo-global Infrastructure Fund, bought during its new fund offer period. It is a close-ended fund. Please advise on whether I should sell or hold these units.
Velayudhan Nair

At present, your loss on the mentioned investment is notional. But, liquidating the investment will convert it into an actual one. Also, liquidating before the expiry may attract an early exit charge, and thus add to the loss. You should make a choice based on your need for liquidity and ability to take on risk. If you are in no urgent need of liquidity and can take on the risk of staying invested until a turnaround occurs, then you should do so. However, if that isnt the case, then you should consider selling the investment.