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Thematic funds

Investors in thematic funds must be willing to ride the highs and lows

I have been investing in the following funds (see table) through an SIP. What do you think? I have been investing in DSPBR T.I.G.E.R since December 2007. Should I continue the SIP in this fund since the performance is not good? If yes, can you suggest a substitution?
- Brajesh Shah

The three equity diversified schemes that you have selected are all good funds. However, there is a strong tilt towards mid cap stocks in your portfolio, which makes it a little risky and volatile. Are you comfortable with that? If not, then substitute any one of the funds with a large cap offering such as IDFC Imperial Equity Plan A or DSPBR Top 100 Equity.

DSP BlackRock T.I.G.E.R is an infrastructure fund. Do you want to exit because you no longer believe in the infrastructure theme? Or are you simply upset that the fund is not performing? From 2006 onwards right till the start of the downturn (January 2008), infrastructure funds did very well. But they have been unable to race ahead in the bull rally that began in March 2009. This is simply because non-infrastructure sectors like IT and Auto raced ahead. But this is exactly how thematic funds work and investors must be willing to ride the highs and lows. If you believe in the theme, then stay invested. If not, discontinue your SIP. However, don't sell your units in DSPBR T.I.G.E.R right now if you do not need the money. If you want to continue with another infrastructure fund, then consider Canara Robeco Infrastructure, Taurus Infrastructure or ICICI Prudential Infrastructure. If you want to continue with a diversified equity fund, then just stay on with your three funds and do an SIP of Rs 3,000 in each of them, which will total to your current monthly investment of Rs 9,000.

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