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What return can I expect from PPFAS Long Term Equity Fund?

This fund does not try to impress you in the short term and has done well over a full-market cycle, says Dhirendra Kumar

How much return should I expect from my SIP in PPFAS Long Term Equity fund? I'm 23 years now.
- Rohit Motwani

I'm expecting a decent return and my benchmark for return is that I should get something for assuming equity risk and get some kind of premium over the fixed income i.e. the fixed income return should get me some premium over the inflation. So I'm taking some risks and I want compensation for all that.

PPFAS Long Term Equity Fund has about a third of its money invested abroad. Assuming that this fund doesn't lose money on that 35 per cent because of the rupee depreciation, the rate differential itself should earn about 5 per cent. But I don't know why the fund house actually hedges it. I personally disagree with them but they do it. So, that's not an advantage for you in this fund.

But this one-third money is invested in very high-quality companies abroad and the rest of the money is invested in relatively cheaper growth stocks. The fund has done very well when I look at the full market cycle. It is not a fashionable fund, as it is not trying to do well to impress you in its portfolio to do well over the next quarter. It has been able to attract a very desirable kind of money which will not disrupt the way it functions. So, all these things are very favourable for this fund and therefore, I think it should be able to beat the index, too. A very promising fund.