Should I sell L&T Emerging Businesses fund?

I have investments in L&T Emerging Businesses Fund and L&T Midcap Fund. Both the funds are in losses. The loss is more than Rs 12,000 in each fund. What should I do? I had made lumpsum investments in both the schemes, 550 days ago.
--Milan Chandra

Jitendra Solanki, founder, JS Financial Advisors, responds:

Before investing in a mid cap and a small cap scheme, you need to understand the risk and return characteristics. Both the categories are more volatile where you might see higher downside than other categories. However, they recover much faster and can deliver higher returns.

To invest in mid or small cap funds, you need to have an investment horizon of at least 10 years. 550 days is too short to judge any scheme unless it is performing very badly in comparison to its peers.


Both the L&T Funds have a good track record. So, stick with these funds but be prepared for higher downside in adverse market scenarios.