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Should I continue with Franklin India Smaller Companies fund?

Dhirendra Kumar suggests taking a long-term horizon while investing in small-cap funds

For the last two years, I have been investing in Franklin India Smaller Companies fund. The returns are not quite impressive as compared to other funds. Should I continue or switch over?
- Mahesh

I think you should stick to it, as Franklin funds are generally very high on quality. In the small-cap-fund space, some stocks always turn out to be a blockbuster but one doesn't know the exact time. In general, small caps have not done well and maybe that's why they are proving to be a little less rewarding as compared to other funds. Having said that, I don't think it's a poor quality fund. It's a decent fund which will take its own time. So, carry on.

Further, when investing in small-cap funds, a timeframe of two years is not enough. It's crucial to have a long-term view when it comes to investing in small-cap funds. This is because these funds do poorly for a prolonged period and then, most of the returns come in a brief period of time.