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SIPs in Mutual Fund

I Have Invested in SIP. Details are follows: RELIANCE BANKING FUND (GROWTH) - 1000/- PM Since NOV-2010, UTI MNC FUND (GROWTH) - 2000/- PM Since May-2015, AXIS ELSS FUND (GROWTH) - 3000/- PM Since May-2015. All of the funds have been selected for long term investment of 15 years. My question is, have I chosen the funds wisely? And I would like to start one more SIP of 2500/- PM in Mid Cap Fund category for about 12 years. Can you please suggest me good funds for investment?

Aug 19, 2015 by Dwarkesh, Gwalior  |   Mutual Fund

You have chosen a Banking sector fund, a thematic (MNC) fund and equity linked savings scheme. For your 80C tax saving, you have selected one of the best ELSS funds and you should continue your SIP in AXIS ELSS fund. As far as sector funds are concerned, a certain amount of investment expertise is required, because these funds are subject to sector risks in addition to market risks, as opposed to diversified equity funds which are exposed to market risks only. At the present moment, banking stocks with a 2 to 3 year investment horizon, can provide very good returns as the economy moves into a more benign interest rate environment and the credit cycle revives in our economy. As such, if you want you can stay invested and continue to invest in Reliance Banking Fund through SIP.

However you should remember that in bear markets, sector funds including banking sector funds are among others, the worst hit. Therefore, you should monitor the performance of the fund and also follow the sector trends. If you are not comfortable with the risk, then you can shift to a good diversified equity fund. As far as UTI MNC fund, even though it is a thematic (MNC) fund, it is more diversified than Reliance Banking Fund. The fund has delivered outstanding performance over the short, medium and long term. Therefore you can remain invested in this fund and continue to invest through SIPs. As far as midcap funds are concerned, Reliance Equity Opportunities Fund, Canara Robeco emerging equities fund, Principal Emerging Bluechip fund, Birla Sun Life MNC fund, DSP Black Rock Micro cap fund, SBI Magnum Midcap, Franklin India Smaller Companies, Mirae Asset Emerging Bluechip and Tata Midcap Funds are good midcap funds. You can consult with your financial advisor to select the right fund for you.

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