Should I continue with ICICI Prudential Value Discovery Fund?

I am investing in ICICI Prudential Value Discovery Fund (Growth) for the past one year through an SIP. The returns are much lower than the benchmark. Is it okay to continue with the fund or switch to another multicap fund? I am ready to take higher risk.
--Nishant Shah

ICICI Prudential Value Discovery Fund is a multicap fund with a great track record. However, the scheme has been underperforming both its benchmark and the category since the last one year. It is underperforming the category even in the three-year period.

In fact, we interviewed the fund manager in July as we started receiving queries from concerned investors like you. You can read the interview here: Should investors worry about ICICI Pru Value Discovery Fund's underperformance?


Also, we just dropped the scheme from our recommended equity mutual fund SIP portfolios (Read: Best mutual funds to invest in 2017) this month.

Having said that there are many seasoned investors who still swear by the track record of the scheme. These investors are ready to give the fund manager more time to prove. You may join them or stop your investments in the scheme.

Since you are investing through SIPs just for a year, it will not be great idea to take the money out of the scheme immediately. If you sell your investments in equity mutual fund schemes before a year, you must pay a short-term capital gains tax of 15 per cent. You may wait till every (or each) SIP installment completes a year before taking a sell call.

However, you may consider stopping the SIP in the scheme and start the SIP in another better performing scheme like SBI Magnum Multicap Fund.

Here are our recommended multicap mutual fund schemes. (Read: Best multicap schemes to invest in 2017)