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    Should I continue to invest in Franklin India Taxshield Fund?

    Synopsis

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

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    I am investing Rs 5,000 per month in Franklin India Taxshield Fund (Growth) since June 2017. After investing for three years, my fund value has decreased by 15%. What should I do? Should I invest in some other funds or should I keep investing in this fund? Please help.
    -Tabrez Hassan


    Franklin India Taxshield Fund has been underperforming for a while. The scheme has started showing weakness since March 2017, and it continues with its indifferent performance till date.You may stop your SIPs in Franklin India and start a SIP in a better performer in the same category. You may not be able to sell all your investments immediately as each SIP instalment has a lock-in period in a tax-saving or ELSS mutual fund scheme. You can sell each SIP as it completes the mandatory lock-in period. ELSS investments come with a mandatory lock-in period of three years.

    You may take a look at our recommended tax saving schemes: Best ELSS funds to invest in 2020

    Things You should consider
    • Annualized Return
      for 3 year: -2.37%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: N.A
    Things You should consider
    • Annualized Return
      for 3 year: -2.74%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.3 Years
    Please keep a track of your investments. Always review the performance of your scheme and compare it with its benchmark and peers at least once or twice a year. If it is underperforming its benchmark for more than a year, you should try to find out what is happening to the scheme. You may go through the interviews of fund manager to find out about his strategy. Sometimes fund managers take contrarian approach and that may result in temporary setbacks. If you are convinced about the fund manager's stance, you may continue with the scheme. Otherwise, you can stop your SIPs immediately, and start investing in a better scheme in the same category. If you have no hope of the scheme bouncing back, you may also sell your investments and invest the money in a better performer in the same category.

    If you do not understand much about mutual funds or investing and you find the task of reviewing the performance a bit tough, you should seek the help of a mutual fund advisor. Do not expose your investments to unnecessary risk only to save a small commission. Invest with an advisor, educate yourself in the meantime, gain some experience and confidence, before start taking care of your investments on your own.

    (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.)

    1 Comment on this Story

    Rahul38 days ago
    There is no shortage of fund houses in India. Why would you want to trust a fund house which has just closed 6 of its scheme in a snap in times when people would need their most.
    I would just withdraw all my money from Franklin and put in a fund house which is more trust worthy.
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