Can your MF weather this?
THE DIP in the Sensex raises a question: what do you do with your mutual fund investments? Experts say it is wiser to hold on to most of it. And if you have started investing through systematic investment plans, do not stop. But you may need to reshuffle your portfolio and should even sell some.
If you are looking at the short-term horizon, keep an eye on portfolio and selectively exit some.
N. Sethuraman, the chief investment officer of SBI Mutual Funds says, "The corporate earnings are expected to grow at 15-18 per cent and we would see the Sensex pick 450-500 points every quarter. In four quarters, the Sensex would again pick 2,000 points."
V.K. Sharma of Anagram, however, says every investor should look at taking out 10-15 per cent of the money. "Metals fell again on LME on Friday evening. Any fund that has commodities exposure will fall further. So investors can partially withdraw from the funds with high exposure to commodities," he says.
In fact, the value of MF investments will never fall as much as the lead indices have and it might make sense to withdraw some money and book some profit and reallocate.
Ravi Sharma of Birla SunLife Mutual Fund says, "If one wants to invest more in mutual funds now, then one should look at diversified equity products. Sector funds fall more in a situation like this."