I have been investing via SIPs in the Sundaram SMILE fund for the past four years. So far, I have invested Rs 46,000 in it. The current value of my investments is around Rs 41,000. Should I stay invested in this fund?
-Rajkumar
Sundaram SMILE invests only in small and mid-cap companies, which do very well when the market is going through a bull run, but do poorly during a bear phase. If your investments in Sundaram SMILE are a small part of your overall fund portfolio, then you should stay invested in it.
Past four years have been extremely unfavourable for such companies. Such funds tend to struggle in a market that we have seen for the past few years. But they prove to be very rewarding in a bull market. Hence, to stay invested you should have a small allocation to such a fund, you should invest gradually which you are doing and have time on your side to reap the long term rewards of investing in a small cap fund.
This article was originally published on July 17, 2013.
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