 |
| Capitalstars Investment Advisor |
Abhay Kushwaha,32, a software engineer, after trying his hands with direct stock investing and incurring losses thought of investing in mutual funds through systematic investment plans (SIP), thinking it is much safer of investing. But he is among the worried lot as one of the equity funds he invested in around one and half years ago is now yielding negative returns. He is worried if he should exit or remain invested in the scheme. He is not alone there are around 44 equity funds (out of 351 funds) across various categories that are delivering negative SIP return over three year period as per Value Research data. Most of these funds are sectoral or thematic funds.
Investors need to understand that SIP is one of the best ways of investing in mutual funds as it helps you average out the cost of investing in a mutual fund but it doesn’t guarantee any return. You can incur losses even if you are investing through SIP.
Your returns from the fund will always depend on the performance of the scheme in which you have invested.
Therefore, even if you are investing through SIP, you should check the performance of the fund regularly and if the fund continues to do badly for the long term, then you should exit says an expert.
“Investors should compare their funds’ performances with their peer funds and benchmark indices at least once in each year. If the fund continues to underperform consistently, they should redeem those funds for the better-performing ones," says Naveen Kukreja, CEO and Co-Founder, Paisabazaar.com, a financial services platform.
However, you should also check if the performance of your fund is down due to the overall market is doing badly then you should continue investing.
“Investors should continue with their SIPs in equity mutual funds even if their returns turn negative due to broader market conditions. Continuing with the SIPs during the market downturn will allow them to accumulate units at lower prices and thereby, benefit from rupee cost averaging," said Kukreja.
“ Investors should keep in mind that equity is a volatile asset class and SIPs in equity mutual funds would earn them optimum returns only if they continue to invest for at least 1 complete market cycle," he added.
We will be happy to help you to select your mutual fund plan. Get more details here: Mcx Tips, Derivative-Free Trial, Stock tips Call on:9977499927
Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927
Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
For more details call on 9977499927 or visit our website www.capitalstars.com
