Should you buy Birla Sun Life Pure Value Fund?

This fund talks about investing in stocks and sectors that which have potential value to be unlocked. However, this is what every mutual fund supposed to do.. isn't it? Well, not necessarily.. The essential difference in this fund and other funds can be understood by the following:

Value investing is about looking for attractive bargains or stocks that are trading at discount to their intrinsic or true valuations. Value investor focuses on past performance and the current fundamentals of the company.

Whereas, growth investors believe in buying stocks with high future growth potential, no matter what the current price is.

Value investing is a conservative style of investing providing low volatility to the portfolio.

If the stock sticks to fundamental investing, it could be really be a different and useful scheme. As we know, it's not intelligent to assume that all mutual fund houses stick to fundamentals n real stocks without running behind technical grabs. No wonder so many mutual fund houses lined up for over-priced Reliance power. Not a fundamental investment by any standard.

Though I normally don't invest in Close-ended funds, this one could be an exception because real fundamental growth needs time.

Fund Manager
Ajay Argal is the designated Fund Manager for the fund. He is currently working as Senior Fund Manager at BSLAMC. He has done B Tech from IIT Mumbai & PGDM from IIM Bangalore and has over 12 years of experience in asset management business.

Ajay Argal is known for his 'stick-to-basics' theory which is very very essential for long term growth and wealth creation. In one of his interviews, Ajay Argal said "I don't get swayed by day-to-day market movements. I keep calm as I know that fundamentals will only get reflected over the long-term".. that is a real confidence booster for me especially when markets are so volatile.

Birla Sun Life Pure Value Fund looks good and is suited for the balanced risk type investors.


Download application form and offer document here...

Type of Scheme	A 3 year closed ended diversified equity scheme
New Fund Offer Price	Rs. 10 per unit
Opening Date of NFO	January 17, 2008
Closing Date of NFO	March 1, 2008
Plans & Options Available	Dividend (Reinvestment/Payout) & Growth. Default - Growth Option/ Reinvestment Facility.
Subscriptions	Rs. 5000/- and in multiples of Re. 1/- thereafter during the NFO period.
Redemption	In Multiples of Re. 1/-
Load Structure	Entry Load: N A Exit Load: Nil&
Benchmark Index	BSE 200
Fund Manager	Ajay Argal

^& All redemptions/switch-outs made during the specified redemption period until the scheme remains closed-end will be charged balance proportionate unamortized issue expenses on the applicable NAV.

Stop Paying Entry Load

Mutual Fund Investors in India have a reason to cheer. You can get away without paying Entry Load, provided you invest directly with Fund House. Though an entry load of 2.25 seems to be a small amount, however, it makes a huge difference to your earnings, especially long term.

Should you buy HDFC Infrastructure Fund?

HDFC Infrastructure Fund is a 3 year close-ended Equity Scheme with automatic conversion into an open-ended scheme upon maturity. NFO closes: 21st Feb, 2008.

India is definitely looking at a huge infrastructure development for next few years at least. And after the recent market crash, the stocks of infrastructure companies are not that highly priced as few weeks back. However, if you are looking for long term investing after the market crash, then there are better options. See Which funds to invest in after the market crash?

HDFC Infrastructure Fund
Pros:

1. Good Fund House
2. No entry load
3. Infrastructure development opportunities in India
4. Good past return by other Infrastructure Funds
   

Cons:

1. Infra stocks might be overvalued again by the time this fund starts investing
2. 3 year lock in period
3. Other current investment opportunities in market
4. Volatile market and fear of US depression

Overall there might be two reasons you can consider investing in this fund:
1. Having invested in large caps and diversified funds, you can park some money in a promising sector or

2. To take advantage of the low market valuations

If your case is 1, then you can consider putting money in existing infrastructure funds, while there prices are down and are not close-ended.

And if you want to take advantage of low market valuations, then you never know how the market would be when this fund starts investing. All the more reason to invest in existing funds now.


If I really want to participate in the India infrastructure story, I would put my money in some existing infrastructure fund and then go for a SIP probably, seeing the volatility of the market.

Which funds to invest in after the market crash?

The recent market crash might have been a disaster for many, however, for long term investors, it has opened a whole new opportunity to invest their money. Several good mutual funds are down by several percentage and if you believe in future of India, this is the right time to invest in it...

Though there are many diversified and sectoral funds to choose from, at this time, it is not recommended to go for sectoral or small cap/mid cap funds. I would personally recommend to buy time tested equity diversified funds from good fund houses with an inclination towards large cap.

Here are 3 funds I would like to invest in at this point of time:


HDFC Top 200

Franklin BlueChip Fund

Reliance (RSF) Regular Savings Fund - Equity Option

Needless to say, growth option for all of them :)