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HDFC Funds out of steam?

Should one continue to invest in the HDFC Equity and HDFC Long Term Advantage funds?

The HDFC Equity Fund and the HDFC Long Term Advantage Fund seem to have run out of steam. Is it advisable to continue investing in them or is it time to exit from these two funds?
- Anonymous

The HDFC Equity Fund and HDFC Long Term Advantage Fund have been two of the best performing funds in their respective categories, but are going through a rough patch of late. However, such short term fluctuations should not alter your investment strategy and force you to sell your quality investments.

As on November 8th 2007, HDFC Equity has generated a return of 38.76 per cent on a year to date basis, almost matching its category average. One cannot classify this as a poor performance, but it is evident that when compared to peers, the fund has not done well. The fund however continues to have a 5-star rating, and is one of the best core picks.

HDFC Long Term Advantage has been a laggard in the ELSS category in the recent past. In the past one year (as on November 8, 2007) the fund has returned a disappointing 30 per cent whereas the category average has been 45.42 per cent. If you have plans of selling your investments exactly after three years, then you could perhaps think of routing your future tax saving investments in better performing ELSS funds which have outperformed the category in the recent past.

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