Question about mutual funds?

Can anybody please explain why many mutual funds (Indian) are giving negative return for last one month? As far as I know, sensex has been fluctuating but never been very low during last one month. Also, I think it may happen in case of sectoral mutual funds because some sectors may be down for last one month, but how is it possible even for diversified equity funds?

6 Replies to “Question about mutual funds?”

  1. mutual funds could churn out excellent returns between 2003–2007.because FII flow was quite those who invested between 2002–2004 got fantastic benefits. those who invested bet2005-2006 got good benefits but those who invested from 2007 to date have got miserable benefits. the reason- market crashed between jan 08 to and feb 09.
    when the market started doing well, the shares that were on top of the market in 2007 are virtually at the bottom in 2010.
    eg–reliance communication which was 2000 in 2007 is only 200 rs in 2010. so those mutual funds who invested heavily in reliance communication in 2007, are at the bottom of the pyramid in 2010.
    i can quote atleast 500 scrips that did very well in 2007 and their price is not even onetenth in mutual funds are suffering. after the market crash in 2008, people stoped investing in equity mfs so they did not have money for fresh investments from 2008. lastly many retail investors flocked to mutual funds from 2007 in anticipation of dividends atleast once a year and that too slighly higher than fds. when this did not happen, peole started withdrawing money and started putting it back in fds. when the market collapsed in 2008, it was a rude shock to people who saw their investments
    tumbling down to onethird of the value.
    still ther are lot of investors who are stuck in mfs and they want to get out but they are not getting their invested amount. if they sell, they will incur heavy losses. so everybody is waiting whether market goes upto 23000-25000. if this happens u will see huge withdrawls fro fms and u will see lots of problems for mf industry.

  2. Depends on the price you bought them at. If you have bought them when the markets were at their peaks, then there may be many stocks that are still underperforming. For more detail regarding which stocks are being held by which fund, you can find that out on the internet. If you can, then hold them for long term, the markets are going to make new highs in the near future.
    All the best.

  3. Funds within the Midcap and Small Cap segments has been under performing. Prices of many mid and small cap stocks have come off there highs and stocks including the good names have also corrected quite heavily.

    Thats the reason why some funds are not doing well.

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