Should I sell my investments in Aditya Birla Sun Life Equity Fund?

I have been investing via SIP in Aditya Birla Sun Life Equity Fund for about a year, with an overall negative return now. I am considering to switch the SIP to Kotak Standard Multicap Fund given its better performance. It also has a slightly lower expense ratio and lower small cap ratio. Please advice if I should go ahead. Any other funds to consider in this category? I am already investing in Axis Bluechip Fund, so want to avoid Axis Multicap Fund.

--Rohan Jain

Chokkalingam Palaniappan, Director, Prakala Wealth Management, responds:


I do agree that the past performance of Kotak Standard Multicap is slightly ahead of ABSL Equity. However, ABSL Equity is a decent fund. You have just started the SIP and hence it is better to continue with the fund. Allow some more time and then decide. You have to live with a fund at least for one full cycle to reap the full benefits of fund manager’s actions. Small and Midcap stocks in a fund, brings alpha over a period of time. Hence if you can wait for 5+ years, no need to go for pure large cap funds. If you want to switch later, you may also look at Invesco India Growth Opportunities Fund and Kotak Equity Opportunities Fund. Both of them come under large & midcap category. Kindly remember that large & midcap category has higher risk-reward ratio when compared with multi cap category.