Some mutual funds are not performing well. Should I sell them?

I am investing in a mix of mutual fund schemes.
Aditya Birla Sun Life Manufacturing Equity Fund
SBI Magnum Multicap Fund
Axis Multicap Fund
IDFC Sterling Value Fund
HDFC Small Cap Fund
Aditya Birla Sun Life Pure Value Fund

Some of the schemes are performing well and some are not. Which schemes should I sell?
-Saurav Bhattacharya

Ashish Modani, Founder, SLA Financial Solutions, responds:


First of all, get used to the reality that some schemes in your portfolio will always be underperform. Its just not possible that all the batsmen you chose will score a century all the time. The secret of wealth creation is to choose simple plain vanilla funds and keep investing for years and decades for compounding to take place. Each fund goes through phases of underperformance and outperformance.

I would ask you to stop investing in Aditya Birla Sun Life Manufacturing Equity Fund. It is a thematic fund. Instead, invest in a large and mid cap fund. Also, focus on asset allocation and not on fund’s performance. You can also give some space to debt mutual funds.

When it comes to investment, it is important to identify why you are investing. Why stands for your dreams. Returns are not 'why' of your investments; its just a byproduct of the journey towards your goals. You have not mentioned your goals and that’s missing badly here.