iStockI have been investing Rs 5,000 every month in HDFC Hybrid Equity Fund. My total investment in the fund is Rs 2,25,000, but the market value is only Rs 1,95,000. What should I do? I am thinking of starting my new SIP in Axis Focused 25 Fund.
-Parminder Singh
You have not mentioned some crucial details like your goal, investment horizon, risk profile, and so on. Without these details, it is not possible to offer you a comprehensive response.
It seems, you have been investing for almost four years and lost around 13% of your capital. As you would know, the stock market has lost around 30% in the last one month. Your scheme is only reflecting the general trend in the equity market. You don't have much of a choice now, except for continuing with your investments and hope for an end to the coronavirus pandemic and revival of the economy and the market.
It is not clear what you mean by starting a new SIP. Are you planning to stop your SIP in HDFC Hybrid Equity Fund and start an SIP in Axis Focused 25 Fund? If yes, you have to understand that these two schemes are not strictly comparable. Hybrid equity scheme is an aggressive hybrid scheme that invests in equity (65-80%) and debt (20-35%). It is relatively less risky and volatile than pure equity schemes that invest 100% in equity. These schemes are recommended to conservative equity investors or new investors to the equity market.
Axis Focused 25 Fund, on the other, is a multi cap scheme with a concentrated portfolio. These schemes are ideal for investors who are ready to take extra risk to earn extra returns. Remember, a concentrated portfolio has the potential to offer higher returns. However, you might also lose big if the fund manager gets it wrong.
In short, you should have a higher risk profile and longer investment horizon of at least seven to 10 years to invest in a focused multi cap scheme.
-Parminder Singh
You have not mentioned some crucial details like your goal, investment horizon, risk profile, and so on. Without these details, it is not possible to offer you a comprehensive response.
It seems, you have been investing for almost four years and lost around 13% of your capital. As you would know, the stock market has lost around 30% in the last one month. Your scheme is only reflecting the general trend in the equity market. You don't have much of a choice now, except for continuing with your investments and hope for an end to the coronavirus pandemic and revival of the economy and the market.
It is not clear what you mean by starting a new SIP. Are you planning to stop your SIP in HDFC Hybrid Equity Fund and start an SIP in Axis Focused 25 Fund? If yes, you have to understand that these two schemes are not strictly comparable. Hybrid equity scheme is an aggressive hybrid scheme that invests in equity (65-80%) and debt (20-35%). It is relatively less risky and volatile than pure equity schemes that invest 100% in equity. These schemes are recommended to conservative equity investors or new investors to the equity market.
Axis Focused 25 Fund, on the other, is a multi cap scheme with a concentrated portfolio. These schemes are ideal for investors who are ready to take extra risk to earn extra returns. Remember, a concentrated portfolio has the potential to offer higher returns. However, you might also lose big if the fund manager gets it wrong.
In short, you should have a higher risk profile and longer investment horizon of at least seven to 10 years to invest in a focused multi cap scheme.
(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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