Should I exit Aditya Birla Sun Life Small Cap Fund?

Should I exit Aditya Birla Sun Life Small Cap Fund?

Market fall

I have been investing in Aditya Birla Sun Life Small Cap Fund since the last two years. Right now, the scheme is giving negative returns (-17 %). Should I stay put or exit the scheme? I can wait for a longer duration, too.
– Ashutosh Bhatt

The small cap space has been going through a lot of pain since the last one and a half years. It seems, you got into this space exactly during this time. The scheme has given negative returns in the one- and three-year horizons. The scheme has failed to beat both its benchmark and category in the same period. In fact, it is at the bottom of the chart during these periods.

You should remember that you are investing in a small cap scheme. These schemes are extremely risky and volatile. That is why they are recommended only to investors with a very high risk-tolerance level and very long investment horizon.

HDFC Small Cap Fund Regular-Growth ★★★★
THINGS YOU SHOULD CONSIDER

  • Annualized Return

    for 3 year: 6.24%

  • Suggested Investment

    Horizon: >3 Years

  • Time taken to double

    money: 3.11 Years

Aditya Birla Sun Life Small Cap Fund-Growth ★★★★★
THINGS YOU SHOULD CONSIDER

  • Annualized Return

    for 3 year: -2.52%

  • Suggested Investment

    Horizon: >3 Years

  • Time taken to double

    money: 3.8 Years

You can use this opportunity to ask yourself whether you can afford to invest in a small cap scheme and whether you have the adequate risk appetite to invest in a small cap scheme. Also, you should invest in a small cap scheme only if you have an investment horizon of at least seven to 10 years. If you are okay on all these fronts, you may invest in small cap schemes.

You have not mentioned whether you are investing through SIP. If yes, you may stop the SIP in Aditya Birla Sun Life Small Cap Fund and start a SIP in HDFC Small Cap Fund or L&T Emerging Businesses Fund.

[“source=economictimes”]