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    Can I continue with these mutual funds in the current market scenario?

    Synopsis

    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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    I have been investing Rs 2,500 per month in each of these mutual fund schemes:

    Axis Focused 25 Fund (Growth)
    HDFC Small Cap Fund (Regular, Growth)
    SBI Magnum Multicap Fund (Growth)
    Mirae Asset Tax Saver Fund (Regular, Growth).

    I have been investing for the last two years. However, I have always seen negative gains from these funds. I am a moderate investor. Are these funds the right choice, considering the current crisis or future scope of performance?
    -Ameya Phalke

    Investors with a moderate risk profile are typically asked to invest mostly in multi cap schemes. Except for one scheme in your portfolio, the other three schemes are in line with your risk profile. You should reconsider your investments in HDFC Small Cap Fund as it is not in line with our risk profile. Small cap funds are meant for aggressive investors with a very high risk-appetite and ability to withstand volatility.

    The performance of your schemes are reflecting the general trend in the market. Though the key indices are up, the undertone of the broad market continues to be negative for sometime. Money has been chasing a few select stocks in large indices. That is what is keeping the key indices up. However, most other stocks are still doing badly. That is why the schemes were performing badly.

    Investors cannot do anything about the current situation as you know the nobody knows how long the pandemic is going to last or when will the economy pick up. If you have your financial situation in control – that is, if you have a large contingency fund, your job is safe, etc – you may continue with your investments in the three schemes.
    Things You should consider
    • Annualized Return
      for 3 year: -4.5%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.11 Years
    Things You should consider
    • Annualized Return
      for 3 year: 6.25%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 4.1 Years

    (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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    2 Comments on this Story

    FININVEST Mutual funds11 days ago
    Dear Ameya
    dont get stressed by looking at thr market movements.u hav nt mentioned whether its one time investment or sip.if its sip just continue ur sip and keep it for atleast 7 to 10 years .if its lumpsum start sip in few schemes and continue .also keep them for 5 to 7 years ur concern will turn in smile
    Sandeep Lagvankar13 days ago
    I think the individual should be told about the difference between Regular and Direct plans.
    The Economic Times