Which mutual fund to choose during a market downturn

Summary: Markets are tanking and everyone's panicking. Sound familiar? This story shows you how to pick mutual funds based on your actual goals and timeline, not headlines, turning downturns into smart buying opportunities through SIPs and the right category mix. Picture this: you check your portfolio and your stomach drops. The Sensex peaked at 85,836 in September 2024, then crashed to 77,163 in March 2026, a nearly 10 per cent freefall that's wiped out months of gains. Your equity funds are bleeding red. WhatsApp groups are buzzing with "should I exit?" panic. And you're frozen, staring at two questions: Which mutual fund should I buy in this chaos? Should I just cut my losses and run? Here's the truth that no one's shouting loud enough: you're asking the wrong questions. Market turbulence doesn't demand new funds or hasty exits, it demands a strategy anchored to your goals, not the market's mood swings. Equities are inherently volatile over the short term, and that's not a bug, it's a feature. The investors who win aren't the ones chasing bargains at imaginary bottoms; they're the ones who matched their fund choices to their timelines months or years ago and are now sitting tight. Let's reframe this. Instead of “What should I do now?”, ask “What did I invest for?” That answer determines everything. And once you see how different fund categories behave across timeframes, the fog clears fast. Understanding how different fund categories behave Not all mutual funds react the same way when markets tank. Check out these category averages (based on direct plans, rolled daily over the last decade as of December 31, 2024): Category Worst one-year return (%) Average five-year returns (%) Category behavior and suitability Flexi-cap funds -26.7 13.8 Diversified pure equity investing across all company sizes, typically tilted toward large caps. Volatile short-

This article was originally published on January 21, 2025, and last updated on March 09, 2026.