I have 800 units in Magnum Taxgain which is currently valued at Rs 48,800, which is not a great return considering three years ago I invested Rs 40,000 in this fund. Should I redeem this sum to invest in better performing funds or direct equity?
- Ramesh Kaul
You are right in your observation about the returns that you will get from Magnum Taxgain at the moment. While it is a good idea to exit a fund that is not faring too well and invest in a better performing fund to gain from the opportunity, there is a lesson that you can draw from this experience; mutual fund selection is important and one should look for a fund which has a significant performance history and track record to invest in. If you are a regular investor in direct equity and understand the risks associated with the same, you should explore a good stock. Alternately, you can consider investing in a large-cap fund such as DSPBR Top 100 Equity or Franklin India Bluechip, which have a consistent performance history and track record to safely invest in.
This article was originally published on April 21, 2011.
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