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Choosing equity mutual funds: Why long-term returns matter, but 1-year performance also deserves a look; experts explain
Mint 49 min ago·28 Oct 2026, 10:44 am
Investors often focus on a fund's three- or five-year performance, which is a solid way to gauge its long-term ability to grow wealth. However, a fund that has struggled over the last year might be facing specific challenges that could impact future returns. This short-term dip could be due to temporary market volatility or a change in the fund's investment strategy.
For investors, this situation highlights the importance of looking beyond just the headline returns. It is crucial to understand the reasons behind a fund's recent underperformance. A temporary market setback is different from a deeper issue with the fund manager's approach or the fund's risk profile.
Moving forward, investors should monitor the fund's portfolio composition and the fund manager's commentary. If the strategy remains sound and the market recovers, the fund may bounce back. However, if the underperformance is due to consistent poor stock selection, it may be time to consider reallocating capital to a more consistent performer.
Key takeaways
- Category: Stocks.
Why it matters
A routine update. Use the price and stock snapshot to gauge how the market is responding.
