The Mutual Fund Show: Should You Keep Investing In Flexi-Cap Funds?

Managers of flexi-cap funds can decide the allocation to large-, mid- and small-cap stocks. Given the recent underperformance of the broader markets, investors may have second thoughts about such funds.

Query 1: I want to retire by the time I'm 45 years old. Currently, I have no mutual fund investments and can invest Rs 5,000 per month. What (Retire Early) funds can you recommend?

Name Santosh Kumar I Age: 32 years

Kshitiz Mahajan: Invest Rs 5,000 in monthly SIPs (systematic investment plans) for 13 years. Increase the investible amount by 15% annually. With 13% expected returns, one can yield a corpus of Rs 42 lakh. Increase SIP amount or time of retirement.

Rushabh Desai: As and when he can increase the amount, he should invest in flexi-cap and mid-cap funds.

Query 2: I have invested Rs 10 lakh in Aditya Birla PSU Fund in January. The returns from this fund have been fluctuating since investment. Should I switch to some other fund or stay invested?

Name: Krishnan I Age: 46 years

Rushabh Desai: Unfortunately, he has entered at a very wrong time for a PSU Fund. If he is in profit right now, I would suggest him to shift to a flexi-cap fund. But, if you're in loss, then just be patient and wait for the right time.

Kshitiz Mahajan: Hold the fund, as we're at the peak of the interest cycle. Allow rate cut and appreciation to come. You can withdraw funds once benefits are reflected in NAV (net asset value of mutual fund). Keep a portfolio with equity participation as post-tax returns in fixed income won't be able to beat inflation.