I have been regularly investing in DWS Alpha Equity Regular - Growth through SIP route since December 2008. However, the fund has since been downgraded from 5-star to 3-star. Therefore, kindly advise whether the fund still remains an attractive one for investment or should I exit the fund now. Also, advise a better fund in case I am advised to exit the fund at this point.
- M.Muraleedharan
DWS Alpha Equity Regular is a large cap diversified equity fund. Despite an average start, the fund flourished in the year 2006 and 2007. Its large-cap bias helped it manage the downside well in 2008. However, in 2009, the fund took some conservative moves and failed to beat the category average, which got reflected in its ratings.
It is necessary to note that declining ratings does not mean that you exit the fund immediately. It’s a signal that you should closely monitor the performance of this fund. However, if it continues to underperform, then you may switch to a better fund such as HDFC Top 200, DSPBR Top 100 Equity. But, keep in mind, this should not happen frequently.
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