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Should I sell L&T Emerging Businesses Fund?

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

ET Online|
Oct 11, 2019, 11.36 AM IST
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I have invested in L&T Emerging Businesses Fund 18 months ago. It was a one-time investment. My money is sinking right now. Do you think I should stay in this fund or should I redeem?
-Anand Bahl

We have been receiving several such queries from investors who have invested in small cap schemes in the last couple of years. Many small cap schemes have been in the negative zone in the last one and a half years. The small cap segment continues to be volatile even after the recent correction in the market.

You should keep in mind that small cap schemes are extremely risky and volatile. That is why they are recommended only to very aggressive investors with a longer investment horizon.

Did you choose the scheme knowing well that it can get into negative zone and it can be extremely volatile? If yes, you may continue with your investments. If you have got into the scheme without realising the risk involved in it, this is the time for you to introspect. Do you have the risk tolerance level to invest in such a scheme?

L&T Emerging Businesses Fund is a good performer in the small cap category. Yes, the scheme is at the bottom heap in the last one year, but its three- and five-year performance is good. If you have an aggressive risk profile and a longer investment horizon, you may continue with the scheme. L&T Emerging Businesses Fund is part of our small cap mutual fund recommendation list.
(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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