My mutual fund is losing money. What should I do?

I have invested in Aditya Birla Sun Life Equity Fund. The scheme has fallen drastically this month. If I withdraw it, I will not even get my capital back. What should I do?
-Shubham Sen

It is not just your scheme, the entire stock market has fallen sharply (and then recovered a bit) the last month due to the Coronavirus pandemic. The market fell around 30-35%, and recovered around 15-20% since then. And the market is likely to remain under pressure since there are no firm cues on how the world is going to tackle the Coronavirus and the recovery of the global economy. Even your mutual fund investments are likely to feel the pinch.

You have not mentioned anything about when you have invested in the scheme or how long do you plan to hold your investments. Here are some pointers for you: you might have heard that equity is risky and volatile in the short term. The current situation sums up how risky and volatile equity can get. That is why investors are asked to bet on equity mutual funds with a long investment horizon.


If you have invested in the scheme to achieve a long-term financial goal, focus on your goal and continue with your investments. If you do not have a long-term horizon and you cannot digest the volatility, you have invested in the wrong asset class. You should reconsider your decision to invest in equity if you do not have the necessary risk profile.