I invested in Sundaram S.M.I.L.E and DSPBR Balanced over five years ago. Though these funds were doing well, of late the returns are negative. Please let me know whether to exit these funds or hold on for some more time.
— Sudarshan Swaminathan
It appears that you invested a lumpsum at one go. That is something we never recommend. You need to be regular and disciplined with your investment. If you had opted for this approach, you would have been investing over various market cycles.
You are talking of your investments delivering negative returns. But you must understand that the market itself has dropped. For instance, take a look at the 5-year returns of Sundaram S.M.I.L.E. In comparison, the Sensex has delivered 2.74 per cent and the Nifty 3.60 per cent.
If you need the money, then sell. If you do not, there really is no need to exit.
In the ‘Equity: Mid & Small Cap’ category, there are better options. In the ‘Hybrid: Equity oriented’ category, DSPBR Balanced is a good performer.
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Rating as on 31st Jan 2012, Returns as on 24th Feb 2012.
This article was originally published on February 27, 2012.
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