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Sensex down; Is it wise to invest in large cap mutual funds now?

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Last Updated: Mar 13, 2020, 03.33 PM IST
Since the market is lower right now due to various reasons, including COVID-19, is it wise to invest in large cap mutual funds for a period of 4-5 years? As the time horizon is not too long, I can't take much risk but want to gain more than what debt funds can offer. What is your view on Canara Robeco Large Cap Fund? I can see lots of negative returns in my ongoing large cap mutual fund investments but I am a little less bothered as they are for very long term.
-Jytoi Jha

As you would know, it is not easy to predict the market, including its bottom. Sure, the market has lost significantly in the last few sessions. However, we do not know whether this is the bottom or whether the market is likely to plumb more depths in the next week. You should follow the rule of thumb in such situations: If you are sitting on cash that you do not need for a very long period, you can invest it in equity mutual funds whenever the market corrects significantly.

You have some money with you, but have only four or five years to invest. In such a situation, you should try to play it safe. We do not recommend equity mutual funds if one does not have a horizon of at least five to seven years. The rule applies to even large cap mutual funds. If you have only four years, you should try to invest in conservative hybrid mutual fund schemes that invest most of the money in debt and a small part in stocks. If you have at least five years, you may consider investing in aggressive hybrid schemes.

Here are some useful links for you:

Best Large cap mutual funds
Best Aggressive hybrid schemes
Best conservative hybrid 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.)

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