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Should I stop my investments in HDFC Equity 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|
Nov 12, 2019, 01.40 PM IST
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I am investing in the following mutual funds:

Mirae Asset Emerging Bluechip Fund: Rs 5,000
Axis Bluechip Fund: Rs 5,000
HDFC Top 100 Fund: Rs 5,000
HDFC Small Cap Fund: Rs 3,000
HDFC Equity Fund: Rs 5,000

All these investments are in direct, growth plans.

I am thinking of stopping my investments in HDFC Equity Fund and start investing in Axis Focused 25 Fund. I am a moderate risk investor and the horizon is about seven years. I can allocate additional Rs 5,000 per month.

We typically ask moderate equity investors to invest mostly in multi cap mutual funds. If the investor wants to diversify to reduce the risk, she can take a small exposure to large cap mutual funds.

You are currently investing in two large cap schemes, a large & mid cap fund, small cap fund, and multi cap scheme. Large & mid cap schemes and small cap schemes are not meant for moderate equity investors. They are suited for investors with a very high risk appetite. Reevaluate your risk profile and look whether you can invest in these schemes. If they are not in line with your risk profile, you should stop investing in them.

You have not mentioned when you have started investing in HDFC Equity Fund. So, it is not possible to offer a personalised advice to you on this. HDFC Equity Mutual Fund had a bad year in 2015. However, the scheme has been in the top or second quartile since then. Axis Focused 25 Fund is a consistent performer. However, you should remember that the scheme has a concentrated or focused portfolio, and it carries higher risk than a diversified multi cap scheme like HDFC Equity Fund.
(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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