Staying Invested Through Volatility
Ratin / 17 Sep 2026 / Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Editorial, MF - Editorial, Mutual Fund
For long-term mutual fund investors, however, such periods are better viewed as part of the market cycle rather than a reason to abandon equity exposure.
Indian Mutual Fund investors are navigating a challenging combination of rising global bond yields, geopolitical uncertainty and elevated crude oil prices. With the US 10- year Treasury yield flirting around 5 per cent and crude oil moving above USD 100 per barrel, this is putting pressure on emerging markets such as India.[EasyDNNnews:PaidContentStart]
For long-term mutual fund investors, however, such periods are better viewed as part of the market cycle rather than a reason to abandon equity exposure.
A major source of resilience in our market today is the growing participation of domestic investors. SIP contributions have grown at an estimated CAGR of 26 per cent over the past decade and recently touched around Rs 32,200 crore a month. Overall purchases have also remained strong beyond regular SIP flows, indicating that some investors are deploying additional money during market weakness. Investor interest has remained visible in the NFO market too, with 17 new fund offers adding to activity.
History also offers an important perspective. In periods when equities, as measured by the BSE 500, recorded negative returns for a financial year, the following two years generated an average double-digit return based on the historical data considered since FY07. Even the weakest outcome was around 10 per cent.
For investors with a five-year horizon, historical observations also suggest that the probability of equity returns failing to exceed the 7 to 8 per cent range associated with debt has been relatively low. This does not guarantee similar future returns. It does, however, reinforce the importance of time in equity investing.
Rather than stopping SIPs or trying to identify the exact market bottom, investors can focus on asset allocation, diversification and disciplined investing. Those with surplus funds and sufficient risk appetite may consider staggered additional investments during corrections.
Volatility can test conviction, but long-term wealth creation through mutual funds ultimately depends less on predicting markets and more on staying consistent through different market cycles.
Shashikant Singh
Executive Edito
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