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Can a moderate investor choose small cap schemes?

If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

ET Online|
Aug 13, 2019, 12.10 PM IST
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I have SIPs in SBI Small Cap Fund (Rs 1,000) , HDFC Small Cap Fund (Rs 500), Reliance Small Cap Fund (Rs 500), ICICI Prudential Balanced Advantage Fund (Rs 100), Kotak Focused Equity Fund (Rs 1,000). Please tell me if these are good for time horizon of 20-25 years. Also, suggest a mutual fund for an SIP of Rs 500 to invest. My goal is wealth creation, and I have a time horizon of 20 years. I have balanced risk.
-Devavrat Shahasane

If you are investing for your long-term financial goals and you have a moderate risk profile, you should invest mostly in multi cap mutual fund schemes. You are currently investing in three small cap mutual fund schemes. These schemes are extremely risky and volatile. They are recommended only to investors with a very high tolerance for risk and ability to withstand extreme volatility. Many investors ignore their risk profile when they have a very long investment horizon. It can be disastrous when the market gets into a tailspin. You may not be able to tolerate prolonged volatility or heavy losses.

For more, read: Best multi cap mutual funds to invest in 2019
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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