Are you invested in these mutual funds which have fallen the most in this market correction? What to do now?
This article shows you what to do given that the stock market has corrected by 10-15% from lifetime highs.
Are you invested in these mutual funds which have fallen the most in this market correction? What to do now?
Posted on 17 Nov 2024
Author: Sayan Sircar
9 mins read
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This article shows you what to do given that the stock market has corrected by 10-15% from lifetime highs.
Disclaimer: The fund names are not recommendations to invest/exit investment in them
📚 Topics covered:
- Why is the stock market falling from its all-time high?
- How much have different mutual funds fallen from 52-week highs?
- How do you manage your recently fallen portfolio?
Why is the stock market falling from its all-time high?
One of the first things that many new investors forget is that:
Stock markets do not grow like an FD
The recent market correction of 10-15% was not unexpected given that the October earnings season had started weak. We hinted at this just a month back: How much money will you lose if the stock market falls in the short term?.
To understand where the markets have fallen and to know the impact on your portfolio, we have shown the fall from a 52-week high for various equity mutual fund categories using data from AMFI.
This is the sister article to this one: Which mutual funds have fallen the least in this market correction? Should you switch?
How much have different mutual funds fallen from 52-week highs?
In each category, we have shown the worst 5 performing funds. In each row, we have given the fund house names since in most categories, there would be only one fund.
Flexicap funds
| Fund house | Fall % |
|---|---|
| NJ Mutual Fund | -14.62% |
| quant Mutual Fund | -13.87% |
| Bandhan Mutual Fund | -10.86% |
| Nippon India Mutual Fund | -10.77% |
| Shriram Mutual Fund | -10.63% |
Midcap funds
| Fund house | Fall % |
|---|---|
| quant Mutual Fund | -13.61% |
| Taurus Mutual Fund | -11.34% |
| ITI Mutual Fund | -10.80% |
| Mirae Asset Mutual Fund | -10.68% |
| Aditya Birla Sun Life Mutual Fund | -10.61% |
ELSS funds
| Fund house | Fall % |
|---|---|
| quant Mutual Fund | -13.60% |
| NJ Mutual Fund | -12.19% |
| ITI Mutual Fund | -11.65% |
| Shriram Mutual Fund | -10.79% |
| UTI Mutual Fund | -10.68% |
Multicap funds
| Fund house | Fall % |
|---|---|
| quant Mutual Fund | -13.28% |
| ITI Mutual Fund | -10.64% |
| HDFC Mutual Fund | -10.07% |
| Bandhan Mutual Fund | -10.05% |
| Mahindra Manulife Mutual Fund | -9.98% |
Large & Midcap funds
| Fund house | Fall % |
|---|---|
| quant Mutual Fund | -13.06% |
| Aditya Birla Sun Life Mutual Fund | -10.92% |
| Bandhan Mutual Fund | -10.66% |
| Mirae Asset Mutual Fund | -10.39% |
| Invesco Mutual Fund | -10.09% |
Focused funds
| Fund house | Fall % |
|---|---|
| Motilal Oswal Mutual Fund | -12.87% |
| LIC Mutual Fund | -12.74% |
| UTI Mutual Fund | -12.37% |
| quant Mutual Fund | -11.85% |
| Baroda BNP Paribas Mutual Fund | -11.70% |
Value funds
| Fund house | Fall % |
|---|---|
| quant Mutual Fund | -12.05% |
| JM Financial Mutual Fund | -10.89% |
| ITI Mutual Fund | -10.37% |
| Bandhan Mutual Fund | -10.36% |
| LIC Mutual Fund | -10.24% |
Largecap funds
| Fund house | Fall % |
|---|---|
| PGIM India Mutual Fund | -11.41% |
| Axis Mutual Fund | -11.16% |
| LIC Mutual Fund | -10.78% |
| UTI Mutual Fund | -10.57% |
| Bandhan Mutual Fund | -10.48% |
Dividend Yield funds
| Fund house | Fall % |
|---|---|
| LIC Mutual Fund | -10.64% |
| ICICI Prudential Mutual Fund | -9.96% |
| Tata Mutual Fund | -9.77% |
| HDFC Mutual Fund | -9.40% |
| Aditya Birla Sun Life Mutual Fund | -9.38% |
Smallcap funds
| Fund house | Fall % |
|---|---|
| Mahindra Manulife Mutual Fund | -10.03% |
| Aditya Birla Sun Life Mutual Fund | -10.03% |
| Baroda BNP Paribas Mutual Fund | -9.46% |
| Franklin Templeton Mutual Fund | -9.45% |
| PGIM India Mutual Fund | -9.20% |
Contra funds
| Fund house | Fall % |
|---|---|
| Kotak Mahindra Mutual Fund | -9.56% |
| Invesco Mutual Fund | -8.90% |
| SBI Mutual Fund | -8.43% |
How do you manage your recently fallen portfolio?
A correction in the equity market allows savvy investors to make more money by rebalancing.
Rebalancing allows you to systematically buy low and sell high
To implement rebalancing, you must first create a portfolio-level asset allocation plan using a tool like the Arthgyaan goal-based investing tool that covers your main goals like retirement / FIRE, children’s college education/marriage, house purchase etc.
We will consider a typical investor portfolio with some stocks, mutual funds, and a mix of EPF, PPF and NPS investments. Say you have assets of ₹50 lakhs and a SIP amount of ₹50,000/month. Your investing plan will have:
- your current asset allocation to equity and debt: say this is ₹30 lakhs in debt and the rest in equity or 40:60
- your target asset allocation of 60:40
To interpret this, the portfolio has:
- ₹20L in equity and ₹30L in debt
- it should have ₹30L in equity and the rest ₹20L in debt (60% of 50 = 30 to reach the 60:40 ratio)
- to rebalance, ₹10L has to be sold from the debt portfolio and invested in equity
In this case, rebalancing is being triggered since the asset allocation is to be changed by 20% points from 40:60 to 60:40. We should, however, rebalance before the gap becomes so vast. For example, a typical value called the corridor can be taken as 5%, i.e. rebalance, when the asset allocation becomes either 55:45 or 65:35 with a target of 60:40.
Using a goal-based investing calculator, identify the amount of equity you need to buy. Then, sell that amount from your debt assets (unless they are locked like EPF and PPF) and invest that amount into equity in one go. If you are not comfortable investing in one shot, do it in a few parts over the next 3-4 weeks. If your debt assets are locked, like PPF and EPF, adjust your SIP amount to be equity-heavy over the next few months.
If you are retired, you should look at your bucket allocation strategy and use this opportunity to transfer some assets from your debt to your equity bucket. Of course, this assumes you have enough in your cash bucket for the next five years’ expenses.
Related Articles
- Which mutual funds have fallen the least in this market correction? Should you switch?
- The worst performing mutual funds of 2021: are you invested in these funds?
- The worst performing mutual funds of 2022: are you invested in these funds?
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This post titled Are you invested in these mutual funds which have fallen the most in this market correction? What to do now? first appeared on 17 Nov 2024 at https://arthgyaan.com
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