I'd invested in two Ultra Short Duration schemes of different fund houses to set up a Systematic Transfer Plan into equity funds. Unfortunately, these funds are giving poor returns due to the downgrade of ILFS bonds. Should I redeem my money and instead opt for SIP in equity funds?
- Hardik
You can well do that, but your money may not have gone substantially down in value.
This ILFS bond default has not translated into that big a problem yet, though there have been funds which went down in value but most other funds were not hit that hard.
Unlike fixed income investments, in equity, a two to five percent fall every now and then is a fairly routine thing. The whole idea of investing in equity in a staggered way is to eliminate the possibility of catching a market high and that you are very well succeeding at. Taking your money out and then doing an SIP will not bring any changes, so continuing with your Systematic Transfer Plans is better.
This article was originally published on December 21, 2018.
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