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Equity Investments Require Patience

Equity funds are long-term investments, don’t churn your portfolio on the basis of short-term performance…

I invested Rs 35,000 in the NFO of ICICI Prudential Indo Asia Equity Fund in September 2007. Two years ago I invested in Magnum Global. Should I hold or exit? 
- Zain Uddin Ahmed

Ideally you should avoid investing in NFOs and select funds which have a good performance history. ICICI Prudential Indo Asia Equity Retail invests 65 per cent of its assets in Indian stocks with the rest in Asian stocks. But what is crucial is your reason for investing in this fund. Did you want a global exposure to your portfolio? In that case, you could give it some more time. It’s a call only you can take.

Magnum Global’s objective is to invest in companies where part of their earnings comes from foreign currency. Of late the fund’s performance has deteriorated. Watch it for a while before you exit.

Please note that investing in equity requires patience. You cannot get disheartened over short periods of time. But keep tracking performance closely to decide whether or not it is worth moving out of.

Fund  Return (%)    
  2007  2008  2009
ICICI Prudential Indo Asia Equity - -50.6 80.93
Magnum Global 52.37 -66.65 119.56
Category Average 59.45 -55.15 84.35
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