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Is a two-year slump a reason to sell your mutual fund? How to assess underperformance
Mint 1 hr ago·21 Oct 2026, 1:36 pm
A mutual fund's recent dip in returns does not automatically mean it is time to sell. Investors often panic when a fund lags behind the market, but this short-term underperformance may be a normal part of market cycles. To make a rational decision, you must look beyond the headline numbers and compare the fund's performance against its specific benchmark index and similar funds in its category over different timeframes.
It is also crucial to evaluate whether the fund still aligns with your financial goals and risk tolerance. A fund that underperformed in the past might be well-suited for your future needs, while a top performer today could become a mismatch tomorrow. By focusing on long-term strategy and consistency rather than short-term volatility, you can make a more informed choice about holding or exiting your investment.
Excerpt from Mint
A fund’s recent underperformance alone is not a reason to sell. Compare it with its benchmark and peers across several time periods, and assess whether it still fits your portfolio and investment strategy. I bought a mutual fund because it was one of the top performers when I invested. It has since underperformed for…Read the original at Mint
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