equity mutual fund schemes, with monthly collections touching Rs 26,000 crore. However, as SIP returns from equity funds have slipped into the red for the last year, retail investors with a long-term horizon and well-defined asset allocation and goals should not stop their allocations as a knee-jerk reaction.
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WHY ARE SIP RETURNS FOR THE LAST ONE YEAR IN THE RED? The value of the units accumulated through the SIP mode of investment over the last one year has fallen due to a sharp fall in the equity markets in the last few weeks. As a result, the net asset value (NAV) of the schemes fell, which has led to a drop in value for investors. The fall has been higher for riskier schemes like small-cap, midcap and some narrow thematic funds, compared to large-cap funds.
SHOULD THIS WORRY INVESTORS? WHAT SHOULD THEY DO NOW?
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View Details» <div data-placement=«Mid Article Thumbnails» data-target_type=«mix» data-mode=«thumbnails-mid» style=«min-height:400px; margin-bottom:12px;» class=«wdt-taboola» id=«taboola-mid-article-thumbnails-118371256»>SIPs help in rupee cost averaging. This method of investing lets you buy a higher number of units when the market is down, thereby averaging your investments. A fall in equity markets should not worry long-term investors using SIP to meet their goals.
Typically, if you have staggered your equity SIPs to a long-term goal, assumed a reasonable return of 10- 12%, and the monthly investments are in line with asset allocation, risk