Should I continue investing in DSPBR Micro Cap Fund?

I have been investing in DSP BlackRock Micro Cap Fund for more than a year now. I have a medium to high risk appetite. If I am considering a time horizon of 3 to 5 years, is it advisable to continue with this fund considering its recent underperformance and growth of micro cap industries? My monthly SIP amount is Rs 2000.
--Sourav Parida

Gaurav Monga, a certified financial planner, responds:

The mid and small cap funds have been performing really well for the last 2-3 years and therefore, the valuation of this segment has also become high.


DSPBR Micro Cap Fund is a small cap oriented equity fund and has been one of the star performers in it's category, but recently the fund house has stopped accepting lumpsum investments and continuing the investments through SIP mode.

The fund manager has taken this step citing the valuations of the segment and dearth of opportunities. This is a lead indicator that the fund manager wants investors to become little cautious while investing and they should have longer investment horizons. Investing in smallcap schemes with a horizon of less than five years is risky. You can continue investing in this scheme if your investment horizon is more than five years from now.