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Shun Varying Performance

Consider exiting an equity fund that has been performing erratically as that can be risky for your investment portfolio

I have SIPs of Rs 1,000 in Birla Sun Life Mid Cap Fund which is now worth Rs 25,000. What is your opinion this fund and I want to invest in pharma, FMCG funds and gold ETF; are these right additions?
-Nitin Karmalkar

Birla Sun Life Mid Cap fund is a 3-star rated mid- and small cap fund which primarily invests in mid-cap stocks. This fund has been an erratic performer with varying performance each year which is risky for your investments. We suggest you consider exiting this fund and instead look at investing in IDFC Premier Equity or Birla Sun Life Dividend Yield Plus, which are both highly rated and consistently performing funds in the mid- and small-cap space instead. Remember that funds in this category are risky and need frequent monitoring.

You can add sector funds such as pharma and FMCG into your portfolio if you understand their risk bearing which is high. Moreover, one should add these funds to the portfolio only when the portfolio is well diversified and the overall sector representation is lacking or you understand the sector to ride its ascending cycle. Likewise, investment in gold, through gold ETFs should be up to 5-10 per cent of your portfolio allocation and no more. If your current portfolio satisfied this checklist; do invest in sector and gold funds.



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