A few funds like Reliance Growth, Reliance Regular Savings Equity and Sundaram Select Midcap were performing very well two years back. How come their performance has fallen suddenly?
-K C Kapoor
Well-performing funds stop doing well at times, which is the nature of the market and the industry. In the case of some funds, like Reliance Growth and Sundaram Select Midcap, the performance has not been good but it isn't disappointing either. In the past two years, the market has also been extremely disappointing. There isn't much to cheer about when you look at where the markets were five years back and where they are today. This has also been the period when the fixed income returns have been very high. Hence, investors feel disappointed even if their funds are doing okay. But whenever you look at the 10-year period, the numbers always look handsome for equity investments. Some of these funds will bounce back when the markets bounce back. Some funds also go out of favour because they become very successful, which is the case with Reliance Growth. Equity funds tend to do well when they're relatively mid-sized. In a struggling market, a large fund focused on mid-cap stocks tends to struggle as well. But there is always the chance of them doing well when the markets turn around. Hence, we would suggest you to look at the performance over an entire market cycle.
