I have an SIP in Reliance Vision fund for the past three years. Now it's time for renewal. I want to know whether I should continue with it or not. If not then suggest some other good funds from where I can expect a good return after eight years. Is gold ETF a better option?
— Plabita
Reliance Vision is a 2-star rated large- and mid-cap fund. All through 2010, when you would have invested, this fund had 3-star ratings. The fund lost its glory long ago and its performance has been on the descend to turn into a 2-star fund in October 2012. There are several better fund options available in this category such as HDFC Top 200, Birla Sun Life Frontline Equity, Quantum Long-term Equity and UTI Opportunities. It would be better for you to cut your losses and exit this scheme and invest in these instead. The lesson for you from this investment is to review the performance of the fund in which you invest at least once a year to analyse and evaluate its performance to continue investing or making a change.
As for investing in gold, we feel one should invest in a gold fund if they foresee the need for gold in the future, such as accumulating for wedding. If you have such a need to consume gold in the future, you can consider investing in a gold ETF. Make sure that you select a fund that has a low expense ratio and that you park no more than 5-10 per cent of your investments into gold.
This article was originally published on March 14, 2013.
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