Mutual Fund Losers: Mostly, we find such stories that cover top-performing mutual funds with stellar performance. What about schemes with negative returns? In this article, we have collated information about funds with over 10% negative returns in 12 months. The list includes funds such as Tata Nifty Realty Index Fund, HDFC Technology Fund, Bandhan Nifty IT Index Fund and others. We have also covered possible reasons behind the negative returns and how one can fix them.
SIP returns in negative after 12 months: What’s wrong?
Systematic investment plans (SIPs) have become quite popular among investors. However, the market has been quite volatile lately, due to which many investors are worried about their SIP returns.
According to various media reports, there are a number of investors who have shared that despite a consistent investment period of 16-18 months, their portfolios are showing negative returns or no growth at all. Which is compelling them to wonder, what’s wrong?
In the equity mutual fund category, at least 60 schemes have delivered negative returns in the past year. Many others have shown only marginal growth between 0% and 1%.
It simply means lakhs of investors are seeing little to no growth and, in some cases, even losses in their SIP portfolios. Naturally, this brings up an important question: what should investors do now?
Here’s what you are doing wrong and how to fix mistakes
During market volatility, it’s quite normal for mutual fund investments to show short-term losses. However, that doesn’t mean an investor should rush to redeem their investments out of fear. Instead, it’s important to stay calm, review their fund’s performance carefully, and consult their financial advisor before making any decision.
Remember, if you redeem your equity mutual fund investments within one year, you may have to pay an exit load of around 1 per cent in most cases, which can further reduce your returns.
Before investing, assess your risk tolerance to ensure your strategy aligns with your financial goals, time horizon, and comfort with market ups and downs.
If your mutual fund portfolio is in the red, take a step back and assess the bigger picture. Compare your fund’s performance with similar schemes in the same category and across different categories.
Why is one year not enough to evaluate SIP performance?
A systematic investment plan is designed for long-term investment, for instance, over 5-10 years or more, as suggested by various financial experts. Therefore, it won’t be enough to evaluate SIP performance in 6 months or 1 year.
Global uncertainty can heavily influence short-term returns in SIP. A longer time horizon allows your investment to benefit from rupee cost averaging and compounding, which are the core advantages of SIPs.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
