Dhirendra Kumar advises being patient with your investments
I have a total of eight funds in my portfolio. Of them, my investments in ICICI Pru Value Discovery have not been performing well for the last six years. Further, it makes about 20 per cent of my portfolio. I don't have any LTCG. So, should I redeem my investments from this fund and invest in Axis Focused 25 or wait? Please advise.
The investment strategy on which ICICI Pru Value discovery stands requires patience. I don't know about six years but undoubtedly, for the past two to three years, the fund has been struggling. At the time of investing in the fund, it might be an outperformer as it was at the top for long.
Although the fund has retained its style purity and remained a value fund managed by the same fund manager, the value-based investing style has been completely out of favour for the last two-three years. The only thing that has changed is the fund's size, which has become very big. But with the kind of portfolio it has, the size, I think, is not as a material since it's dominated by large caps. Further, I don't feel it's suffering from any of the ills of managing a very large small-cap fund or any such strategy kind of issue.
You may have lost patience. However, with only about 20 per cent of allocation towards ICICI Pru Value Discovery, I think you should persist a bit more. This is because things turn around when we least expect them to. Although it has been a really long period, I don't know what the trigger will be for the turnaround.
Further, there's quite a bit of a possibility that when things change, ICICI Pru Value Discovery Fund may start performing, while Axis Focused kind of fund or the focused strategy in general, may end up sailing in a different direction and you just may regret your decision of switching. So, for now, be patient and do set a timeframe for the same.