I have been making SIP investments in IDFC Premier Equity Fund. Of late it has not been doing well. I have been reading through all your columns to switch to a better performing fund. Does that mean I should switch the entire corpus to a new fund or shift my existing SIP investment to a new fund? I have stayed invested in this fund through the SIP route for last three years and it has given me good gains. Will I lose these gains if I am investing the entire corpus in a new fund?
- Sudeep Thotan
We see no reason for you to switch out of IDFC Premier Equity Fund. The fund's one- year return of 57 per cent is ahead of the S&P 500, though it is short of the category. Its five-year record is still well ahead of the category. It is a four-star rated fund as per our ratings. You might not be impressed with its one-year and three-year performance, but fund returns for short time frames certainly should not be seen in isolation and you need to view them with reference to the risk the fund takes on. We find that the fund has a bias towards quality companies and generally carries much lower risks than its peers. This feature may be important in the mid- and small-cap category, where the downside in the event of a market correction is high.
You can see its returns in comparison with the category average returns (as of June 19) in the accompanying table.
| YTD | 1-Month | 3-Month | 1-Year | 3-Year | 5-Year | |
| IDFC Premier Equity returns (%) | 5.57 | -3.44 | -4.81 | 33.63 | 30.37 | 19.44 |
| S&P BSE 500 returns (%) | 0.17 | -1.89 | -4.52 | 11.61 | 18.58 | 8.99 |
| Category returns (%) | 2.94 | -1.11 | -2.5 | 31.2 | 31.71 | 17.07 |
| Rank within Category | 23 | 114 | 102 | 51 | 31 | 16 |
| Number of funds in category | 112 | 114 | 114 | 112 | 52 | 47 |
This article was originally published on June 22, 2015.
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