Can I continue with my mid and smallcap fund?

I have been investing in mutual fund direct schemes for a long time. Can we continue in mid and small cap mutual fund or need to move to balance fund?

--Koteshwar Rao

You have not shared your investor profile or details of your investments. So, it is not possible to offer a personalised advice.


Investments are chosen on the basis of goals, horizon and risk profile. That means, an investor with an aggressive risk profile would choose a mid and smallcap scheme to achieve her long-term financial goals. Similarly, an investor with a very little appetite for risk would opt for a balanced scheme to achieve his long-term financial goals. This will not change whether the market is on an upswing or downturn.

You do not have to change your allocation just because the market has entered a volatile phase. If you have a high risk appetite, you can still continue with your mid and smallcap scheme. In fact, lean phases in the market allows SIP investors to accumulate more mutual fund units and maximise profits in the long term.

If you are new to mutual funds and find it difficult to monitor and manage your investments, you should consider hiring the service of a mutual fund advisor. An advisor would be in a better position to offer you personalised advice.