Ask Value Research

Invest in aggressive equity funds only for the long term

Large cap equity funds are not particularly aggressive and the adventurous investor must look elsewhere.

My fund portfolio has SBI Magnum Emerging Businesses, Reliance Equity Opportunities, HDFC Equity, DSP BlackRock Top 100 Equity and Reliance Gold Saving. How are these funds? Can you suggest a more aggressive large-cap fund?
-Vishal

You've chosen a set of good funds, but remember, equity funds are only for long-term investments of at least five years, preferably more. Equity funds are volatile and investing for shorter periods is not a good idea. This is doubly true for aggressive funds. Generally speaking, large-caps have only a limited scope for being aggressive because the main characteristic of an aggressive fund is that it invests in smaller, riskier companies. Some large-cap funds--ICICI Prudential Focused Bluechip equity, for example--may be aggressive because they take concentrated positions but this is not the mainstream style of large-cap equity investing.

Therefore, if you are a long-term investor and are looking for more aggressive funds, you'll have to look at our Large & Mid and Mid-cap categories. One caveat, the gold fund in your portfolio is an odd one out. We believe that gold is not a suitable investment for sustained growth in the future. The other funds in your portfolio are reasonably aggressive and well-performing funds. Another possible exception is DSP BlackRock Top 100, which is not particularly aggressive.



Ask Value Research aks value research information

No question is too small. Share your queries on personal finance, mutual funds, or stocks and let us simplify things for you.


Other Categories

Informed fund ideas, better judgment. Every month. Mutual Fund Insight, every month since October 2002.

Take charge. Know more. Keep more. Mutual Fund Insight helps you do all three — every month