Is it time to invest in mid-cap funds? Also, I have my investments in L&T Infrastructure Fund which is not giving me healthy returns? Should I hold it or sell it off?
I don't know how long the L&T Infrastructure Fund it has been into existence. But if you invested in the fund during the boom time of 2007-08 when everybody was blindly investing in the infrastructure sector, then I feel you should give it up.
The entire premise of investing in mutual funds is that you enjoy the benefit of diversification. From that perspective, you should not even invest in mid-cap funds. Rather, multi-cap funds should be your choice. With their go-anywhere mandate, these funds help you diversify easily by investing across the available investment universe.
While investing in mid-cap funds means that you won't be able to get exposure to the stocks of small or large companies, investing in infrastructure funds will not give you exposure to consumer or technology companies. This is a compromise on diversification. In my opinion, about 70-80 per cent of an investor's money should be well-diversified. This can be easily achieved by investing in multi-cap funds.