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Can I continue to invest in these mutual funds?

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|
Dec 12, 2019, 02.22 PM IST
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I am investing in the following mutual funds:
SBI Mutual Fund: Rs 1,000 from 2016 and Rs 1,500 since May 2018
Mirae Asset Emerging Bluechip Fund: Rs 2,000 since November 2017
Franklin India Smaller Companies Fund: Rs 2,000 since November 2017
DSP Midcap Fund: Rs 2,000 since June 2017
Nippon India Banking Fund: Rs 2,500 since December 2017
ICICI Prudential Banking and Financial Services Fund: Rs 2,000 since June 2017

Should I continue with these mutual funds or exit?
---Aftab Ali


Shifali Satsangee, Founder, Funds Veéda, responds:

You have not mentioned your age and risk profile. I am assuming that you have a slightly aggressive risk appetite. Your existing portfolio has exposure to a large & mid cap scheme, mid cap scheme, small cap scheme, and two sectoral schemes. Sectoral schemes are highly risky and are not suitable for retail investors, unless you want to bet on a specific sector and have full knowledge about it. Similarly, small cap schemes can also fall sharp and go through long rough patches.I would recommend you to add a multi cap scheme to lend stability to your portfolio, whenever you plan to increase your SIPs further.

I would like to reiterate that wealth creation happens best when we have a longer investment horizon. I always advise a minimum 10-year investment period for SIPs for most effective returns and alpha creation. Please note, it is the basic DNA of the market to be fraught with volatility. So, it is natural to witness ups and downs in valuations. Investing patiently, staying away from predictions, greed and fear, and cultivating long-term thinking, would hold you in good stead.

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