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Exit Dilemma

Get out of a fund if it is poorly performing or has achieved its goal

I have invested Rs 2 lakh in Fidelity India Value Fund in Jan 2010 and now I am getting a return of 19.68%. Should I sell off this fund and should I invest in HDFC Top 200 or any other fund as per your suggestions?
- Deep Kumar

This multi-cap fund was launched in December 2009 and is just over a year old. There is very little to comment on this fund which seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related securities, in the Indian markets with higher focus on undervalued securities. It could also additionally invest in Foreign Securities in international markets.

You need to ask yourself if the fund has achieved what you had invested in it for. If it has and you wish to exit, you should. There is a lesson for you from this investment; one should ideally invest in funds that have a proven track record and history to back its performance. A new fund should be bought only if it explores a compelling idea or fills a void in the portfolio that needs attention. This is a multi-cap fund like many others that have a proven and longer track record to evaluate.

HDFC Top 200 is a well performing large- and mid-cap, 5-star rated fund. It is a very good fund to invest in; however, your investments should be governed by your financial goals for which you invest. It may be a good idea to decide what you wish to invest for and select funds appropriately.



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