Mumbai: Majority of the systematic investment plans or SIPs — the popular vehicle of investing in mutual funds — in equity schemes have generated less than 8 per cent returns in the past 10 years.According to an ET study based on Value Research data on products that have existed for over a decade, 174 out of the 241equity schemes have returned less than 8 per cent every year in this period, 42 have generated 8-10 per cent and 25 — the top performers — have given over 10 per cent returns annually.The stock market fall of the past two months has bitten off a chunk of the returns. The Sensex and the Nifty are down 23 per cent from their highs late in January. While mid- and small-cap schemes had taken a beating because of the tumble in these shares since January 2018, funds that bet on largecaps managed to stay afloat because of the rally in a clutch of blue chips.The selloff has resulted in several equity schemes posting returns lower than gold and fixed income — represented by liquid schemes — in the past 10 years.“One must keep in mind we are comparing SIPs to gold and fixed income when equities have seen a sharp erosion of 25-30 per cent, while gold is at its all-time high and fixed income has benefited due to a series of rate cuts,” said Rupesh Bhansali, head (distribution), GEPL Capital. 75440594Wealth advisers suggest investors should follow the process of filtering and weeding out non-performers more often. For instance, if a fund continuously underperforms its benchmark and is in quartile three and four for 2-3 years, investors would be better off exiting it and moving to a better fund in the category.“Underperforming funds should be identified in your periodic review exercise and remedial action should be taken,” said Amol Joshi, founder of Plan Rupee.
from Economic Times https://ift.tt/3aHiYnj
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