The current returns are the one that the fund has already delivered and one can't say what the future return will be, says Dhirendra Kumar
Is Canara Robeco Equity Diversified Fund good for investment with a time frame of eight to ten years? I want to make a one-time investment and through an SIP. I have selected this fund based on its three-year return.
Also, I invested in Quantum Tax Saving Fund in 2013 and redeemed my investments in 2016. At that time, the fund gave very good returns. But when I checked the returns in 2019, the numbers were not at all compelling. Can this happen with Canara Robeco Equity Diversified Fund as well that I invest in it and after a while, the returns may fall?
Answering your second question first, returns may change like you saw in the case of Quantum Tax Saving Fund. This is because what you are seeing right now is the return that the fund has already delivered and one can't say what the next three-year return will be. Also, if you want to invest for a time frame of three years, then equity should not be your choice. Further, in the case of Canara Robeco Equity Diversified Fund, there have been various time periods when the performance hasn't been good. In the current market turmoil, the fund witnessed a fall, with its one-year and even three-year return having fallen quite a bit. As with all equity funds, the ups and downs of the markets have been reflecting in this fund's performance as well.
Having said that, Canara Robeco Equity Diversified Fund is a good fund. If you invest regularly with a time horizon of eight-ten years, this fund may give you a meaningful return especially from investments made at this point of time.
Regarding investing lump sums, my suggestion is that one shouldn't make one-time investments. Spread your investments via SIPs even if over a small period of time like six months to one year.