Dear Sir, I am doing sip in dsp mid cap fund its annual return is 21%, can i switch to dsp tiger infra fund which return is 30% ? current value of mid cap fund is now 115000

Ans: You are investing in a mid cap fund through SIP. It has given 21% annual return.

You are now thinking of switching to an infrastructure-focused fund with 30% past return.

The idea is understandable. But let us analyse your plan from a 360-degree financial lens.

Understand the Nature of Sector Funds First
Infra funds are sector-specific mutual funds.

They invest mainly in infrastructure-related companies.

These sectors include power, roads, cement, railways, and ports.

Sector funds are cyclical in nature.

Their performance depends on government policy and capital expenditure.

They may show high returns for short periods.

But they can also underperform for long phases.

Returns are not stable or consistent.

You may gain 30% one year and -20% another year.

Compare Mid Cap Fund vs Infra Fund Properly
Mid cap funds are diversified across sectors.

They invest in companies beyond just infra.

They give better long-term stability than sector funds.

Sector funds like infra are high-risk high-reward.

Mid cap funds also see growth but with better balance.

They manage risk better through stock diversification.

Your DSP Mid Cap Fund has returned 21% annually. That’s already strong.

It shows consistency over time, not just a temporary spike.

Don’t Chase Past Returns Alone
Infra fund showed 30% return recently.

But that is past performance, not a guarantee.

Many people jump to sectors after high returns.

Then they face underperformance in the coming years.

Market always works in cycles.

When infra slows, your whole fund will drop.

Sector funds lack diversification.

You are exposed to single-theme risk.

Why You Should Not Switch Fully to Infra Fund
Your goal should be steady wealth building, not chasing fads.

Mid cap fund is growing your wealth consistently.

Switching fully to infra fund is putting all eggs in one basket.

Sector allocation should be limited to 10–15% of the total portfolio.

That too should be for those who can accept high volatility.

You can add small amount in infra, not switch fully.

Let the core of your portfolio remain diversified mid or multicap funds.

How to Strategically Approach Infra Fund
If you want to benefit from infra growth, do it carefully.

Do not shift full Rs 1,15,000 from mid cap fund.

You can consider investing 10–15% only, around Rs 15,000.

Do not stop your existing mid cap SIP.

Let mid cap fund continue to grow with stability.

Add new SIP in infra fund only if you understand its risk.

Use it as a satellite holding, not core holding.

Avoid Direct Plans – Choose Regular Plans Through Certified Professionals
If you are investing in direct plans, please be careful.

Direct plans don’t provide portfolio review or switching advice.

You may make mistakes in choosing funds or exit timing.

Direct plans also don’t offer emotional support in bad markets.

Investing through regular plans with Certified Financial Planner and MFD is better.

You get timely rebalancing, updates, goal review, and right decisions.

Over long term, proper guidance gives better outcomes than cost savings.

Don’t Go Behind Index Funds for Sector Investing
Some sector funds may be index-based.

Index funds just follow the benchmark blindly.

No fund manager takes decision to exit risky stocks.

This becomes a major problem during market crash.

In case of infra slowdown, index funds will fall fully with no protection.

Actively managed sector funds have better risk control.

Choose regular active funds with proper management.

Avoid index infra funds or ETFs altogether.

Understand Sector Rotation Risk
Infra may be doing well now.

Next year, it may underperform while other sectors rise.

You cannot time this easily.

Most investors enter late and exit in loss.

Sector rotation is not suitable for long-term SIP investors.

Leave this strategy to expert fund managers.

Stay with diversified equity unless you are very experienced.

Long-Term Wealth Creation Needs Patience
Don’t get distracted by short-term outperformance.

Good funds work well across cycles, not just one rally.

Mid cap category has delivered strong CAGR over 10–15 years.

Sector funds fail to do so in most time frames.

The goal is stable, long-term compounding, not random high returns.

Your Rs 1.15 Lakh Should Be Treated Carefully
Let’s summarise how to manage it now:

Keep Rs 1 lakh in the same mid cap fund.

Use Rs 15,000 to start SIP in an infra fund (optional).

Do not stop your current SIP in mid cap.

Monitor both funds every 6 months.

If infra fund becomes volatile, reduce exposure.

Take help from Certified Financial Planner for review and switches.

Don’t go direct. Use regular funds with proper tracking.

Finally
You are already on the right path with your mid cap SIP.

It’s better to stay steady than chase trends.

Infra fund may look attractive today, but it carries more risk.

Your wealth needs structure, diversification and review, not short-term excitement.

Stick to mid cap as your core. Add infra only as a small part, if needed.

Avoid emotional decisions. Stay goal-focused and guided.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment