Riding The Market Wave

Market dynamics are changing constantly. Identify the changes to review and realign your mutual fund portfolio

- Aprajita Sharma

The idea of 'mutual fund sahi hai’ seems to have caught on with investors. From 3.11 crore at the end of March to 3.31 crore at the end of August, the number of outstanding SIPs has been consistently on the rise.

But MF investors are still a worried lot. While markets have bounced back swiftly post-Covid, just like the quick recovery after the 2008-09 crash, mutual fund long-term averages are still below expectations, largely in single-digits. The Sensex closed at 38,357.18 on September 4, only 8 per cent away from the record closing of 41,952 on January 14, 2020. However, MF categories — large mid-cap, mid-cap, multicap, large-cap and small-cap — have yielded 7-8 per cent returns in the last five years, and up to 11 per cent in the last 10 years, although the returns have been in double-digits since their March lows. “Apart from stocks bought by ETFs and FIIs, the overall market hasn’t performed well. But it does not mean that you ditch your MF investments,” says Sunil Subramaniam, Managing Director, Sundaram Asset Management Company.

The Correction

Most of the top performers across categories have registered double-digit returns in the trailing 10-year period. Even the five-year trailing return for top performers has been above 8 per cent. Mirae Asset Emerging Bluechip Gr from the large and mid-cap segment performed best across categories with 14.56 per cent return, followed by Parag Parikh Long Term Equity Reg Gr (14 per cent) in the multi-cap category and SBI Small Cap Fund Reg Gr (13.65 per cent) in the small-cap category.