Mutual Fund Strategy: Why You Shouldn’t Exit Underperforming Funds Too Soon

Market volatility often pushes investors to exit underperforming mutual funds, but Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealt advise against frequent changes. Fund performance is cyclical-schemes that underperform in the short term can quickly turn into top performers. Historical examples show how funds like Kotak Emerging Equity Fund and HDFC Flexi Cap Fund bounced back strongly after weak phases. Instead of reacting to short-term returns, investors should review portfolios every 12-18 months and stay disciplined. A balanced approach across flexi cap, large cap, dividend yield, and large & mid-cap funds helps diversify risk and capture growth. The key takeaway: focus on long-term wealth creation, trust fund manager strategies, and avoid emotional decisions during market swings.