Should I switch my SBI Bluechip fund for higher returns?

Ans: It’s great to see your commitment to SIP investing over the past seven years. Let’s review your situation and provide some guidance on whether to switch funds or stay invested.

Current Investment Overview
Fund: SBI Bluechip Fund.

Investment Period: 7 years.

Monthly SIP: Rs. 1,000.

Returns: Principal amount invested has more than doubled.

Appreciations
Discipline: Consistent investing over 7 years shows excellent financial discipline.

Returns: Doubling your principal is a commendable achievement.

Assessment of Current Fund
Performance: While the returns are good, you’ve noticed other bluechip funds performing better recently.

Stability: SBI Bluechip Fund is a well-regarded fund with a history of stable returns.

Considerations for Switching Funds
Performance Comparison
Past Performance: Look at the performance of other bluechip funds over similar periods.

Consistency: Check if the outperformance is consistent over multiple timeframes (1 year, 3 years, 5 years).

Fund Manager and Strategy
Fund Manager: Consider the experience and track record of the fund managers.

Investment Strategy: Review the investment strategy and sector allocations of the funds.

Expense Ratio
Costs: Compare the expense ratios of your current fund and potential new funds. Lower expense ratios can contribute to better net returns.
Benefits of Staying with SBI Bluechip Fund
Stability: The fund has shown stability over the long term.

Past Performance: Your current fund has already provided good returns.

Transaction Costs: Switching funds may incur transaction costs and exit loads.

Benefits of Switching to Another Bluechip Fund
Potential for Higher Returns: Other funds may offer better returns based on current market conditions.

Diversification: Switching can offer a chance to diversify your investment within the bluechip category.

Suggested Approach
Stay Invested with Regular Reviews
Monitor Performance: Continue investing in SBI Bluechip Fund while monitoring its performance against peers.

Periodic Review: Conduct a detailed review every 6-12 months. Adjust if the performance consistently lags behind other funds.

Partial Switch
Diversify: Consider starting a new SIP in another high-performing bluechip fund while maintaining your current investment.

Evaluate: This way, you can benefit from diversification and evaluate the performance of the new fund.

Final Insights
Patience: Long-term investing requires patience. Short-term performance fluctuations are normal.

Balanced Decision: Make a balanced decision based on long-term goals, not just short-term returns.

Consult a CFP: For a personalized strategy, consulting a Certified Financial Planner can provide valuable insights.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in