I have been investing Rs 1,000 every month in SBI Emerging Businesses since 7 months. I face heavy losses now. Should I stay invested in this fund?
SBI Emerging Businesses is a five-star rated fund in mid and small cap category. Investments in this category are most likely to face heavy volatility and their value will see sharp falls many a time. However, the long-term gains will more than compensate for the volatility. These funds are meant for investment horizon of at least five years or more.
While the risk factor is indeed there, the fact that its assets have doubled in just a span of a year speaks volumes about its ability to reward those who repose faith in it.
You should not worry about losses in this fund in the past few months, because seven months is too less a time to judge an aggressive equity fund. If you are really disturbed because of these losses, you shouldn't have invested in equity funds at all. If you can stomach short-term volatility and don't need you money soon, invest regularly for at least five years. Or else go for debt investments.