Ask ET Mutual Funds: How long should I hold Birla Sun Life Frontline Equity Fund?

I have invested Rs 2,000 in Birla Sun Life Frontline Equity Fund (G). I want to invest Rs 5,000 more in mutual funds. Since I have already invested in a largecap scheme, which multicap and midcap funds should I invest? Also, for how long should I hold my investment in Birla Sun Life Frontline Equity Fund. I have invested for one year.

--Yash Bhati

You should invest in equity funds like Birla Sun Life Frontline Equity Fund only if you have a higher risk tolerance and an investment horizon of at least five to seven years. Also, you don’t have to look to complete your portfolio by adding schemes on the basis of large, mid, small, etc. You should add a scheme to your mutual fund portfolio only if it matches you risk profile. If you have stomach for high risk and volatility, you can consider investing in a mid or smallcap scheme to your portfolio. However, be prepared to stay invested for at least seven years as the valuations in these segment are pretty stretched at this moment.

Here is a link to our recommended SIP portfolios. You can choose a portfolio based on your risk profile and SIP amount or choose schemes from the list.

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