Should I switch to Kotak Standard Multicap Fund?

I have been investing in the Aditya Birla Sun Life Equity Fund via SIP for the past one year. The scheme has given negative returns. I am considering switching the SIP to Kotak Standard Multicap Fund, given its better performance, slightly lower expense ratio, and lower exposure to small caps. Should I switch to Kotak Standard Multicap Fund? Or should I consider any other mutual fund in this category? I am already investing in Axis Bluechip Fund, so I want to avoid Axis Multicap Fund.
--Rohan Jain

Chokkalingam Palaniappan, Director, Prakala Wealth Management, responds:

The Kotak Standard Multicap Fund has performed better than ABSL Equity Fund in the past. However, ABSL Equity Fund is also a decent peformer. Since you have recently started the SIP, it is better to continue with the fund. Give it some more time and then take a call.

You have to live with a fund for at least one full cycle to reap the benefits of a fund manager’s actions. Small and mid cap stocks in a fund brings alpha over a period of time. If you can wait for five plus years, there is no need to invest in a pure large cap fund. You may also consider investing in Invesco India Growth Opportunities Fund and Kotak Equity Opportunities Fund. Both the funds come under the large & mid cap category. Kindly remember, the large & mid cap category has a higher risk-reward ratio than the multi cap category.