VR Logo

Consistently Downhill

Consider replacing a mutual fund only when its performance has been going consistently downhill…

I have SIPs in HDFC Equity, Fidelity Equity and Franklin India Bluechip for long-term investments. Should I invest in these funds for the short term and then review the SIPs or stick to investing in them for 3 to 5 years considering their track record?Shibu Chakraborty

Scheme  Category  Rating  3-yrs Ret   5-yrs Ret
HDFC Equity Eq: Multi Cap ***** 20.43 18.4
Franklin India Bluechip Eq: Large Cap ***** 15.29 15.25
Fidelity Equity Eq: Large & Mid  **** 15.15 16.93
Return as on August 04, 2011, Ranking as on July, 2011

Excellent fund selection in terms of performers. Your portfolio is well diversified across categories and fund houses. Yet one must look at the fund performance at least every quarter to see how it is performing vis-à-vis its peers and benchmark. If the fund is consistently downhill, it would make sense to replace it with another one from its category.
When investing in any equity product, one must always have long-term view in mind. Never invest in equity with a short-term view in mind. A minimum three years time frame is good enough. Also, if you sell your units in an equity fund within a year of buying, you end up paying short-term capital gains tax.



Post Your Query