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This article is more than 3 year old.

Mutual Fund Corner: 'I have invested in DSP Micro Cap Fund with SIP of Rs 5,000 per month, what should I do?'

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Want to invest in mutual funds but don’t know how to go about it? Get all your mutual fund related queries answered by our expert, Manoj Nagpal, managing director and chief executive officer, Outlook Asia Capital, on our show Mutual Fund Corner.

Mutual Fund Corner: 'I have invested in DSP Micro Cap Fund with SIP of Rs 5,000 per month, what should I do?'
Want to invest in mutual funds but don’t know how to go about it?
Get all your mutual fund related queries answered by our expert, Manoj Nagpal, managing director and chief executive officer, Outlook Asia Capital, on our show Mutual Fund Corner.

Q: 60-year-old Mukund Deshpande writes to us from Mumbai. I have SIP of Rs 5,000 per month in the DSP Micro Cap Fund for last two years. Right now, the fund is not giving the returns. I have the investment horizon of five more years. Should I continue with this fund? If not, please suggest me a better fund, which can be moderately aggressive.
A: DSP MicroCap Fund is now the DSP Small Cap Fund. It's high risk, high return fund. The fund is a top performer in the first leg of the rally, but has not captured the rally in the last two years effectively. Especially on a YTD (Year To Date) basis, it's down around 25 percent, which is more than the small cap category. SIPs and small cap funds are a heady combination and needs at least a 10-year time-frame.
Being a retired person and requirement for moderate aggression, this combination may not be best suitable for you. I prefer that you move in to a multicap fund or even a balanced fund since your horizon is just five years of which two years are already gone. Consider ICICI Multicap Fund if you want pure equity or the Mirae Hybrid Equity if you are okay with a balanced fund.
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