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JM Core 11 has been a poor performer since its launch & has been unable to go past its NFO NAV…

I have bought 10,000 units of JM Core 11 during its NFO. Its current NAV is around Rs 3.8. Should I hold on to this fund or come out of it? Please suggest as to what should I do?
- A B Raju

Launched in February 2008 as the markets were getting into a tailspin, this mid- and small-cap fund with its concentrated portfolio of 11 stocks had everything going against the narrow selection. The fund has been a poor performer ever since and has not managed to go past its NFO NAV. There is a lesson for you from this investment; never invest in an NFO unless the new fund has a compelling idea to offer or has something special which is lacking in your portfolio. It is always advisable to invest in proven funds which have sound track record over extended market cycles. For instance, there are better performing mid- and small-cap funds such as DSPBR Small and Mid Cap or IDFC Premier Equity that you could have considered instead of JM Core 11. The opportunity loss by holding on to a poor performing will only get compounded; you should cut your losses and exit this fund for better opportunities in other funds.

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