MF Returns Turn Negative After 6 Years — What Should Investors Do Now?

Before we dive into what investors should do, it’s worth remembering the foundation of long-term mutual fund investing. Many people start with SIPs, but not everyone understands the concept. So let’s begin with the basics.

After nearly six years of steady growth, the mutual fund market has finally hit a rough patch. Recent volatility, global macroeconomic pressures, and sector-specific corrections have caused many equity schemes to show negative short-term returns. For investors who have enjoyed a long stretch of positive performance, this sudden dip has raised questions—especially for those who are new to investing or mid-way through wealth-building goals.

If you are invested in popular fund houses like sbi mf or across any other AMC, this downturn may feel uncomfortable. But negative returns are not unusual; they are a natural part of market cycles. What matters is how investors react, how they reassess their goals, and how they use tools to plan ahead.

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Before we dive into what investors should do, it’s worth remembering the foundation of long-term mutual fund investing. Many people start with SIPs, but not everyone understands the concept. So let’s begin with the basics.

What is SIP and why does it matter during market volatility?

A question many beginners ask is: what is sip?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly into mutual funds—usually monthly. It helps investors ride market volatility, buy more units when prices fall, and benefit from compounding over the long term.

When markets turn negative, SIPs become even more valuable because:

• You buy fund units at lower prices
• Your average cost reduces
• Future market recoveries amplify gains
• Emotional decisions are minimised

This combination is what makes SIPs resilient, especially during phases like the one we’re witnessing now.

Why are mutual fund returns turning negative?

Several factors have contributed to the recent dip in returns, including:

• Global economic uncertainty
  Shifts in interest rate policies, geopolitical tensions, and currency fluctuation have triggered sharp corrections in global markets.
• Overvalued sectors cooling off
  Some sectors that ran up sharply over the last two years are now undergoing healthy corrections.
• Profit booking by institutional investors
  Large investors taking profits often leads to short-term declines.
• Domestic policy shifts and earnings slowdowns
  Quarterly earnings volatility has affected sentiment in certain segments.

Even leading fund houses like sbi mf, known for stable and diversified portfolios, have experienced short-term fluctuations.

But the key point to remember is that short-term negative returns do not define long-term wealth creation.

What should investors do when mutual fund returns turn negative?

When markets look scary, the instinct is to pause, stop SIPs, or redeem investments. But these reactions often lead to poor long-term outcomes. Here’s what financial experts typically suggest:

1. Stay invested — market cycles are natural

Negative returns are temporary, but long-term compounding is permanent. Exiting during a correction often means missing the recovery phase.

2. Continue your SIPs

When prices are low, SIP contributions buy more units, helping build higher future value. This is how SIPs smooth out volatility.

3. Rebalance your portfolio only if required

Check your asset allocation. If equity exposure has fallen due to a correction, rebalancing can bring your portfolio back to your intended risk level.

4. Avoid checking your portfolio every day

Daily tracking increases anxiety. Instead, review performance quarterly or semi-annually.

5. Revisit your long-term goals

Investments should be linked to goals, not short-term market moves. If your goals are 5–10 years away, short-term declines won’t matter.

6. Use this opportunity to top up investments

If your risk appetite allows, adding lump sums during corrections may help boost long-term returns.

Short-term negativity often presents long-term opportunity.

What long-term investors need to remember

Data from market history consistently shows that periods of negative returns are followed by recoveries. Mutual funds—especially diversified equity funds—have demonstrated resilience across cycles spanning decades.

Here are three truths long-term investors should always keep in mind:

Short-term volatility is normal

It is impossible for markets to move in one direction continuously. Corrections are routine and healthy.

Compounding works best when you stay invested

The biggest mistake is breaking the compounding cycle by exiting too early.

Recoveries often happen quickly

Many investors miss the strongest recovery days because they remain out of the market.

This is why both new and experienced investors should focus on broader trends instead of reacting to short-term dips.

Should you change mutual funds during a downturn?

This is a common worry, especially for investors in large AMCs like sbi mf. The answer is simple:

Switch funds only if:

• your fund has underperformed its category consistently for 2–3 years
• the fund’s investment strategy has changed significantly
• the fund no longer aligns with your risk or goals

Do not switch funds because:

• markets have turned negative
• returns have temporarily dipped
• you are anxious watching short-term losses

Always make decisions based on long-term performance and category comparison.

Why goal-based investing remains the safest approach

Even during volatile phases, goal-based investing keeps you focused. Once your investments are tied to specific goals—education, retirement, home purchase—temporary dips feel less stressful.

With clear goals, you can:

• choose suitable time horizons
• align investments with risk level
• evaluate progress periodically
• avoid emotional reactions

And SIPs naturally fit into this strategy because they promote disciplined, long-term investing.

How digital calculators help during uncertain markets

Even when markets turn negative, tools such as SIP and goal calculators help you understand the potential of your investments once the market recovers.

Using a calculator helps you:

• check how long-term projections change
• adjust SIP amounts if required
• estimate real growth over 5, 10, or 15 years
• stay focused on your final goal instead of short-term dips

This is especially helpful for new investors who may be worried about current volatility.

Using the Bajaj Finserv Mutual Fund App to plan ahead

The Bajaj Finserv Mutual Fund App provides a practical, easy-to-use platform for both SIP and lump sum investors. It includes tools that allow you to:

• understand what is sip and how SIPs behave in volatile markets
• explore fund options including categories similar to popular sbi mf schemes
• calculate long-term projections through SIP calculators
• track your investment performance
• make data-driven, goal-based decisions

Knowing how your investments are progressing helps reduce worry during market downturns.

Final thoughts: Stay calm, stay disciplined, stay invested

Negative mutual fund returns after six strong years may feel unsettling, but this phase is temporary. Market cycles turn, sectors recover, and long-term investors often benefit from staying the course.

The smartest move now is to continue SIPs, avoid emotional decisions, review goals calmly, and use tools to understand long-term projections.

Wealth is created through discipline—not by reacting to every dip.