Should I sell Franklin India Smaller Companies Fund?

I have investments in two mutual fund schemes: Franklin India Smaller Companies Fund and ABSL Pure Value Fund. Both these schemes are not doing well. Both are giving negative returns from last one year. Should I switch to another fund? I have a long-term horizon of five to seven years. Please guide me.
--Santosh Kumar Mallick

You are investing in a smallcap scheme and a value fund. Both are good performers in their respective category. Your schemes are offering you negative returns because the stock market has been down in the last one year.

Franklin India Smaller Companies Fund has underpefromed its benchmark and category in one- and three-year horizons, but it has outperformed both its benchmark and category average by a wide margin in the five-year period. ABSL Pure Value Fund’s performance also follows the same pattern.


You have not mentioned your risk profile – so it is not possible to comment about the suitability of these schemes to you. Assess your risk appetite and make sure that these schemes are in line with your risk profile.

Smallcap schemes are typically recommended to aggressive investors, who can stomach a lot of risk and volatility. Value funds are ideal for conservative investors who subscribe to value investing.

If you are a new investor and do not understand much about investing in mutual funds, consult a mutual fund advisor before proceeding further. You should not take unnecessary risk with your money.