ABSL Small Cap Fund - Growth (D) - Should I redeem?

Q & A Forum › Category: Investments › ABSL Small Cap Fund – Growth (D) – Should I redeem?

vinodkpr asked 6 years ago

Hi Srikanth, I had invested ABSL Small Cap Fund -Growth Direct plan for 12 months. I had invested 30K INR and I see it is down -22% now. What should I do with this fund? Should I redeem or switch to another fund? Please suggest an alternate fund in that case. Thanks, Vinod

4 Answers

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Sreekanth Staff answered 6 years ago

Dear Vinod, May I know your investment objective and time-horizon for this investment? Do you have any other investments in MFs? (If so, you may share the Scheme names).

vinodkpr replied 6 years ago

Dear Sreekanth,

Thanks for the quick response. Here are the details.

ABSL – Small cap was for a long term investment – next 5 years for retirement.

Other investments are (since last 16 months) :

L&T Hybrid Equity Fund (G) – Rs.2500 per month
ABSL Equity Fund (G) – Rs.2500 per month
ICICI Pru. PHD Fund (G) – Rs. 2500 per month
ICICI Pru Value Discovery Fund (G) – Rs.2500 per month
Nippon India Small Cap Fund (G) – Rs.2500 per month

The above ones are long term investments ( 5 year horizon) to accumulate money for retirement.

ICICI Pru Multi Asset Fund (G) – One time investment of Rs.2 Lakh . This is a rental deposit which I have to return in 2 years time to the tenant.

Please let me know your recommendation.

Thank You,
Vinod

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Sreekanth Staff answered 6 years ago

Dear Vinod, Kindly have a re-look at ICICI Value Discovery fund. It has not been performing well in the last couple of years. You may increase your allocation to Hybrid and Multi-cap fund (HDFC hybrid & Birla Equity). You can do this by reducing the allocation to small-cap funds & ICICI Value Dis fund. Overall, Small & Mid-caps have been on the downward trend in the last 1-2 years. Hence this negative performance. The risk profile of Small cap oriented funds can be very high. You can expect higher volatility. Have a really long-term view say >10+. May I know how many years are left for your expected retirement??

vinodkpr replied 6 years ago

Thanks a lot Sreekanth. I work in private sector and mostly in 2025 I will have to retire and depend on passive income after that.

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Sreekanth Staff answered 6 years ago

Dear Vinod ji, As your investment horizon is around 5 years, kindly have higher allocation to Hybrid funds only. Advisable to avoid investing in Mid/small cap funds. Related articles :

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Sreekanth Staff answered 6 years ago

Also, as you near your retirement goal (age), advisable to move your accumulated corpus to little safer investment avenues, if you are highly depending on this corpus to get regular source of income during your Retirement age.