Financial Guidance - Should I Stop SIP in SBI Funds?

Q. I made SIP in SBI Magnum Global (Rs 1,000 per month) and SBI Magnum Contra (Rs 1,000 per month). My investment horizon is 4-5 years. I read in your column that both these funds are not performing well compared to peers owing to change of fund manager. Should I stop SIP in these funds? If yes, please suggest 2-3 other funds in which I should start SIP. Should I redeem my money from these funds?

Sameer Kulkarni, Pune, on email

A. Sameer, I have highlighted the performance of a few good funds along with the funds in question. You will notice that  both the funds are in the top position in the 5-year category. But they leave a lot to be desired in the 3-year and 1-year category. Normally, one would look at the long-term performance of a fund to judge the performance. In this case, the slip in performance is pretty huge to ignore. When read in conjunction with the fact that there was a change in the fund manager in the interim and that the investment style of Contra has changed over time, one must be alert. The Contra fund, to my eye, does not seem to follow a contrarian approach, of late. It operates more like a regular growth-oriented equity scheme, taking away its attraction. SBI Global is an aggressive fund which also delivered top returns in earlier years. It has more of mid-cap stocks and can be labelled a mid-cap fund for peer comparison. Whatever be the reason, the fact remains that their performance has slipped. Unfortunately, both funds have slipped in risk-adjusted returns evaluation too (which is more important to me). I am sure different advisors would have different opinions, but my view is that if the fund is no longer good for further investments, then why should one leave his old investments in it?