Dhirendra Kumar reviews a senior citizen's portfolio and suggests the next course of action
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My wife and I are both senior citizens and retired from government jobs. We are doing SIPs in Axis Long Term Equity Fund and Franklin India Taxshield Fund. In terms of returns, I am satisfied with these funds. Apart from tax-saving funds, there are two other funds - ICICI Prudential Equity & Debt Fund and Sundaram Mid Cap Fund. The returns from these two funds have not been good. Kindly advise should we continue with our SIPs in these two funds or switch to other funds?
- K.K. Madan
First of all, congratulations that you are doing SIPs in retirement and that you do not require regular income. The first two tax-saving funds chosen by you are good performers and the next two funds are good, too. However, the current scenario isn't perfect for the last two funds.
Having said that, ICICI Prudential Equity & Debt Fund is a hybrid fund and I am quite surprised that it hasn't been giving you good returns. The underperformance you are talking about; however, depends on when you have started investing in these funds and what time frame you are using to measure their performance.
Your disappointment may be because you have been seeing a decline in value since the time you have invested in these funds. Having said that, both Sundaram Mid Cap Fund and ICICI Prudential Equity & Debt Fund are good performers. The latter being a hybrid fund balances both the risk and returns. Thus, I would say not to redeem your SIPs from these funds and keep a time horizon of at least three to five years. This should provide you with meaningful returns.