Should I exit L&T Emerging Businesses Fund?

I have been investing in mutual funds since 1.5 years. I am investing Rs 1,000 per month in L&T Emerging Businesses Fund. The scheme has been in red from the past one year. Should I continue to invest or exit the scheme? I have an investment horizon of 4 to 5 years.
--Ariz Zaidi

Prableen Bajpai, Founder & Managing Partner, Finfix Research & Analytics, responds:

You are investing in a fund that is recommended to investors with a very high risk appetite. The stock markets have been unsettled for the past one and a half years, with huge corrections across the small and mid cap space.

L&T Emerging Businesses Fund has around 65 per cent and 35 per cent in small and mid cap stocks respectively. It is a decent fund and meant for investors with an investment horizon of seven years or more. If you can give more time to your investment, stay invested. If you can’t, stop further SIPs in the scheme. Do not redeem your investments and allow it to grow.


You can opt for a conservative fund such as a balanced advantage or dynamic asset allocation fund for your SIP investment.