Mutual fund
Rajeev Khera: I have been investing in Quantum Long Term Equity Fund for the past three years through
SIP. Earlier, it delivered better returns than its benchmark and category. But this year, it has lagged in both areas. What is the reason? Should I stop the SIP?
Rohit Shah, Founder and CEO at Getting You Rich, replies:
Most mutual funds go through such cycles of underperformance. In this case, your investment period of three years and observation period of one year is too early to reach any conclusion. We have not noticed any major change in the fund attributes or style. One reason for underperformance could be the relatively higher level of cash holding by this fund. The fund is known to be conservative. The rolling returns for recent period and the long- term SIP returns indicate a satisfactory picture. So, we suggest that you remain invested and continue the SIP as well. It is difficult to have top- performing funds in your portfolio all the time. Focus on accumulating absolute returns that will eventually help you build the power of compounding in your portfolio.