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Should I continue to invest in L&T Emerging Businesses Fund?

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ET Online|
Aug 29, 2019, 12.20 PM IST
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I have been investing in seven mutual fund schemes for the last four years.
Aditya Birla Sun Life Tax Relief 96
Canara Robeco Emerging Equities Fund
DSP Small Cap Fund
ICICI Prudential Technology Fund
IDFC Tax Advantage (ELSS) Fund
L&T Emerging Businesses Fund
Sundaram Rural and Consumption Fund

I have invested Rs 5.72 lakh until now, and the current value of my investments is Rs 5.85 lakh.

Most of the mutual fund schemes are giving positive returns, but L&T Emerging Businesses Fund and DSP Small Cap Fund are in negative. Should I continue to invest in these two funds? Also, is my portfolio good?
--Deepti Saini

Vishal Dhawan, Founder, PlanAhead Wealth Advisors, responds:

Both L&T Emerging Businesses Fund and DSP Small Cap Fund have good long-term track records. The sharp fall in the small cap segment have impacted these schemes. The fall has been due to the excessive valuations in the small cap segment, which has been significantly corrected. You may consider investing through SIPs in both the schemes if you have the liquidity and the ability to stay invested for seven to 10 years.

Also, avoid investing in thematic/sectoral schemes. I would ask you to exit the ICICI Prudential Technology Fund and Sundaram Rural and Consumption Fund. You can invest the money in an index fund to get the benefit of market returns at a lower cost. You may also consider investing in an international fund to get the benefit of international diversification in your portfolio.
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