How well is my fund doing? SIP on this fact

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.

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