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Should I continue with my existing SIPs or change it

I have started investing in following four Mutual Funds through monthly SIP of Rs 1000 each, since July 2015 with investment horizon of 10 years, Birla Sun Life Frontline Equity Fund - G, ICICI Pru Focused Bluechip Equity Fund - G, Canara Robeco Emerging Equities - G, UTI-Mid Cap Fund - G. Since I have getting negative growth in these funds, should I continue with these fund or should I change any of above funds, Also please suggest 2 more funds in which I should invest Rs 1000 each SIP with 3-5 years horizon?

Feb 17, 2016 by Himanshu, Gurgaon  |   Mutual Fund

Birla Sun Life Frontline Equity and ICICI Prudential Focused Bluechip Equity are large cap funds. Canara Robeco Emerging Equities and UTI – Mid Cap are midcap funds. Over your period of investment, from July 2015 till date, Nifty, the index of 50 largest market cap stocks fell by over 15%. Over the same period the Nifty Midcap index fell nearly 10%. It is only natural that your funds are giving negative returns. The sentiment in the market over the last 6 months has been overwhelmingly negative, driven by largely global concerns mainly China and crude oil prices. Weak domestic corporate earnings and the failure of the India Government to pass important legislations in the Parliament only added to the prevailing pessimistic global sentiments. In such market conditions, even good mutual funds cannot give good results. However, the mutual fund that you have invested in are all good funds with excellent long term track records. We have discussed the long term track record of these funds in the following articles.

Birla Sun Life Frontline Equity has a great track record of wealth creation among Large Cap Funds

Consistently strong performance from one of the most popular large cap funds

Canara Robeco Emerging Equities: 5 years of strong performance by this Mid and Small Cap Fund

We are in the bear market right now. However, since you have a 10 year investment horizon you should not worry, because bear markets do not last long. Market will eventually recover and go to new record highs in the next 10 years. That is how markets have always behaved in the past. You should be patient and continue to invest in a disciplined manner through your SIP. In fact, investments made through SIPs through this volatile period will be very rewarding for you, since in the last 6 – 7 months you would have bought units at a low cost.

As regards additional investments, you can simply increase the SIP amounts in one or two funds that you have selected based on your preference for large cap or midcap funds (midcaps can be more volatile than large cap, but it can outperform large cap in the long term). Alternatively you can select two funds by going through the following articles below, in consultation with your financial advisor.

Best mutual fund consistent performers in 2015: Large Cap Funds

Best Small and Midcap Mutual Funds: Consistent performers for investment in 2015

You should bear in mind that, investing in a large number of funds may not necessarily result in better results and may sometimes, even lead to sub-optimal returns. You should discuss with your financial advisor, what is suitable for you and make the appropriate decision.

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