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Don't Chase Recent Performance

Birla Sun Life Pure Value fund has done exceptionally well over the past year. Find out if it's a good investment choice

I want to invest ₹1 lakh in a fund that will give me high returns at average risk. I have shortlisted Birla Sun Life Pure Value fund. Considering that the fund's NAV is at an all-time high, should I invest in it right now or wait for the markets to correct?
- Farhan

Birla Sun Life Pure Value fund has benefited phenomenally from the market turnaround by having invested in a set of stocks from the mid- and small-cap universe, which were relatively out of favour. The fund has given returns of more than 100 per cent over the past year, but even though it is likely to retain its value focus, we don't think these kind of returns can be replicated. Hence, one shouldn't get carried away by the recent performance of this fund. It is still a good fund to invest in, but it should only be a small part of your portfolio. If you're going to be investing in only one fund, then this may not be the ideal vehicle and a mainstream, diversified fund would be more suited. Also, don't invest in lump sum; spread your investments over 6-8 months at least.



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