Ask ET Mutual Funds: How much returns can I expect from TIGER Fund?

I have recently started an SIP of Rs 1,500 in DSP BlackRock T.I.G.E.R. Fund. Since the market is at all-time high, do you think I can make any profit in the coming years? What would be the time line for profits?

--Anurag Sarangi

Vishal Ramaswamy, a mutual fund advisor, responds:

Generally, as a thumb rule, MF SIP returns are calculated at five to seven year cycles at an average of 13-15 per cent annualized cumulative aggregate growth rate (CAGR). Your choice of DSPBR TIGER Fund falls under the infrastructure sector category and it is a high-risk, high-return product. The government is finding it very tough to push spending in infrastructure because of its spending limitations. GST is an unknown factor which will bring its own set of surprises, so one cannot predict with certainty that tax reduction and increase in tax base alone would solve issues affecting demand and credit cycle.

You can expect a return of 11-13 per cent (conservative estimate). However, if for some reason, the government and private companies do increase expense on infrastructure, one can expect returns in the range of 22-25 per cent.


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