I have invested in TATA DIGITAL REGULAR FUND for the last 18 months and it is still negative 19%. Should I exit?

Ans: This is a fund focused on the Technology Sector which has been weak due to the steep correction in Nasdaq. One needs to understand the risks associated with sectoral funds. Ideally, investors who are able to make active calls of entry and exit of sectors only should invest in such funds. Now that you have invested, I would suggest you can wait for a rally in the sector and then exit and move to a diversified equity fund.

Ans: Hello Brij and thanks for writing to me. UTI Flexicap fund is a good fund and you can continue to invest in it.

If you share your objectives for investing and risk appetite, I may recommend other schemes.

Ans: Hello Amitava and thank you for writing to me. Tata Digital India Equity fund is a good fund and you can continue to invest in it.

Do understand that as it is a sectoral fund, its performance will depend on the performance of the sector.

Ans: Hi Shree,
When did you brought it? If you check the holding of this fund, there major allocation is to Infy ~20% and TCS ~18% and all other in major IT companies. IT as a sector is not doing good since last 1year as we are the mojor supplier of services to countries like US and EU, these countries are in problem and hence impacted the sector. You need to hold this fund for atleast 5yrs to see the real benefits.

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Ans: Evaluating Your Investment in Tata Digital India Fund
I understand your concerns about the performance of your investment in the Tata Digital India Fund. Let's assess the situation and explore potential courses of action.

Assessing Fund Performance

It's crucial to evaluate the fund's performance relative to its benchmark index and peers in the same category. Reviewing its historical returns, volatility, and consistency can provide insights into its overall performance.

Understanding Market Conditions

The underperformance of the Tata Digital India Fund may be influenced by various factors, including market dynamics, sectoral trends, and economic conditions. India's digital sector, in particular, may experience volatility due to regulatory changes, technological advancements, and global market shifts.

Considering Investment Objectives

Reflect on your investment objectives and risk tolerance to determine whether the fund's current performance aligns with your financial goals. If your investment horizon is long-term and you have a high-risk tolerance, short-term underperformance may not be a cause for immediate concern.

Exploring Alternatives

If you're dissatisfied with the Tata Digital India Fund's performance or seek to diversify your portfolio, consider exploring alternative investment options within the same sector or broader market. Consulting with a Certified Financial Planner can provide valuable insights into suitable alternatives tailored to your specific needs.

Reassessing Portfolio Allocation

Review your overall portfolio allocation to ensure it remains aligned with your investment objectives and risk tolerance. Diversifying across different asset classes and sectors can help mitigate risk and enhance long-term returns.

Patience and Discipline

Investing requires patience and discipline, especially during periods of underperformance. Avoid making impulsive decisions based solely on short-term market fluctuations. Stay focused on your long-term financial goals and trust in your investment strategy.

Seeking Professional Advice

If you're uncertain about the best course of action regarding your investment in the Tata Digital India Fund, seeking guidance from a Certified Financial Planner can provide clarity and peace of mind. A personalized financial plan tailored to your goals and circumstances can help navigate through market challenges and optimize your investment portfolio.

In conclusion, while the underperformance of the Tata Digital India Fund may be concerning, it's essential to take a holistic view of your investment strategy and remain focused on your long-term financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in