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SIP or Fund IPO?

Subhead: I have invested in Franklin Prima through an SIP for two years. Should I have gone for an IPO instead of investing in a long-term fund like Prima? What do you suggest? -
Saradha S

I have invested in Templeton Prima Fund and I opted for Systematic Investment Plan for two years in the same fund. But my colleague at office feels that I should have gone for Mutual Funds IPO instead of investing in a long-term fund like Prima? What do you suggest?
—Saradha S

It's good to see that you have chosen the Systematic Investment Plan (SIP) mode for investing and not opted for a mutual fund IPO. Systematic Investment Plan is a simple device that helps you to save and invest in a disciplined manner without having to time the market, as it allows one to invest regularly in highs as well as the lows of the market and overall helps in averaging out the total cost of acquisition taking out the volatility of the markets.

In addition to this Franklin Templeton Prima Fund doesn't charge an entry load on investments made through SIP, which is an added advantage for you. In comparison to this investing in a mutual fund IPO is not an advisable option because in a new fund one doesn't have a performance track record, which is otherwise available in an old fund. Hence investing in a Mutual fund IPO is all the more risky as you have to take a call on the portfolio which the fund manager would construct in future.

Considering your choice of Franklin Templeton Prima Fund, it is one of the best performers in its category with a proven track record of more than 11 years and as per our latest rating it is one of the five starred funds.

So, you can stop worrying now and can pat your back for making a good investment decision. Happy investing!!

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