I would like to invest in these two funds: Sundaram BNP Paribas S.M.I.L.E. Reg-G and Sundaram BNP Paribas Select Midcap Reg-G. Are my selections right? And when would you advise me to invest?
-Sunil Daryani
Both Sundaram BNP Paribas S.M.I.L.E. Reg and Sundaram BNP Paribas Select Midcap Reg fall under the mid- and small-cap funds category. They are the best funds in their peer group. You may invest in them if you already have large-cap diversified funds in your portfolio. The mid-cap funds will augment your portfolio returns in a rising market, while the large-cap funds will hold up better when markets tumble. However, mid- and small-cap funds should not take up more than 20 per cent of your portfolio.
As for your second question, we at Value Research believe that markets cannot be timed. Instead if you choose funds carefully based on their past track record and invest in them in a disciplined fashion, they are likely to deliver good returns. So we advise that you invest in all mutual funds via the Systematic Investment Plan (SIP) route.
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This article was originally published on September 08, 2010.
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