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I have been investing in Aditya Birla Sunlife Frontline Equity and Tata Balanced Fund for last 18 months through the SIP route. I find both the funds’ performance below their peers and benchmark. Should I continue with these funds or switch to any better funds in their category for 10 years? Please advise.
Gajendran K
No it would be better to hold both funds. It is best to take stock of equity fund returns over long time frames of five years plus, to gauge how it has performed across an entire market cycle. Aditya Birla Frontline Equity remains a top quartile fund over 3 year, 5 year and longer time frames. Its consistent beating of the benchmark and peers in the last ten years and continuity of style and fund manager are reasons to hold on.
Tata Balanced Fund is similarly a top-quartile fund over 5 and 10 years, but has slipped up against the category in the last 1 and 3 years. The fund has been a consistent benchmark beater, except for the last one year when it has lagged. However, this could be partly because the fund is very conservatively managed compared to many others in the category. Tata Balanced Fund’s debt portfolio is almost wholly invested in G-Secs/top rated corporate bonds and its equity portfolio is more than 70 per cent invested in large-cap stocks. It is not advisable to exit an equity or equity-oriented fund based on just one year’s underperformance, especially if it is an established fund with a long record.
Send your queries to mf@thehindu.co.in
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