Stock Analysis, IPO, Mutual Funds, Bonds & More

Can I continue with these mutual funds in the current market scenario?

ET Online|
Last Updated: Jun 29, 2020, 01.37 PM IST

Summary If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

I have been investing Rs 2,500 per month in each of these mutual fund schemes:

Axis Focused 25 Fund (Growth)
HDFC Small Cap Fund (Regular, Growth)
SBI Magnum Multicap Fund (Growth)
Mirae Asset Tax Saver Fund (Regular, Growth).

I have been investing for the last two years. However, I have always seen negative gains from these funds. I am a moderate investor. Are these funds the right choice, considering the current crisis or future scope of performance?
-Ameya Phalke

Investors with a moderate risk profile are typically asked to invest mostly in multi cap schemes. Except for one scheme in your portfolio, the other three schemes are in line with your risk profile. You should reconsider your investments in HDFC Small Cap Fund as it is not in line with our risk profile. Small cap funds are meant for aggressive investors with a very high risk-appetite and ability to withstand volatility.

The performance of your schemes are reflecting the general trend in the market. Though the key indices are up, the undertone of the broad market continues to be negative for sometime. Money has been chasing a few select stocks in large indices. That is what is keeping the key indices up. However, most other stocks are still doing badly. That is why the schemes were performing badly.

Investors cannot do anything about the current situation as you know the nobody knows how long the pandemic is going to last or when will the economy pick up. If you have your financial situation in control – that is, if you have a large contingency fund, your job is safe, etc – you may continue with your investments in the three schemes.

(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

Also Read

What is an equity mutual fund?

What are debt mutual funds?

What is a mutual fund?

Why are most mutual fund investors `aggressive’ these days?

Should I sell these mutual funds and invest elsewhere?

Mutual fund investors give middlemen the slip

Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links

Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service