Sensex down nearly 8% in 2026. Best time to top up your mutual fund SIPs?

With the benchmark index - BSE Sensex down nearly 8% to a level of 78,581 as of August 6, 2026, has left many investors wondering whether this is an opportunity to reassess their equity exposure and consider increasing their SIP contributions or continue with the same amount of mutual fund SIPs.

Market experts attribute this fall to several global uncertainties and believe that investors should see this correction as normal market behavior rather than a reason to panic and continue with mutual fund SIPs without any interruption.

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Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance told ETMutualFunds that the recent correction reflects global uncertainty, higher valuations following a strong rally, some earnings moderation, and cautious foreign investor flows.

Minocha further said that a 8% decline is typical market behaviour and should not concern long-term investors, it is advisable to continue SIPs without interruption, as these plans accumulate more units when prices are lower and attempting to time a “perfect” entry point is difficult and often results in missed opportunities.

Shivam Pathak, CFP and Founder of Asset Elixir shared with ETMutualFunds that the correction has been driven by global uncertainties, higher crude oil prices, FII outflows, and valuation moderation.

Pathak further said that it is a normal market correction, and investors should continue their SIPs, as lower markets help accumulate more units over the long term.

The benchmark index was at 85,188 on January 1, 2026, but is now down by nearly 6,607 points or 7.79% to a level of 78,581 as of August 6, 2026. In the last six months, the benchmark index was down 5.68% and in the last one year, the index was down 2.64%.

Should investors review their MF portfolio and add large caps?

A market decline can be a good opportunity to review whether the portfolio remains aligned with an investor’s financial goals and target asset allocation. It is also worth assessing whether increasing exposure to large-cap funds could provide greater stability and act as a safety net amid continued market volatility.

To this, Pathak said that investors should review their asset allocation and rebalance if needed, rather than react to short-term volatility and the correction has made large-cap funds relatively attractive, making gradual allocation a sensible approach.

Echoing similar opinion that investors should review their portfolios in relation to financial goals and target asset allocation, rather than reacting to market sentiment, Minocha said that if equity exposure has fallen below your intended level, this correction may present an opportunity to rebalance.

He further said that large-cap funds may be more attractive after the decline, particularly for conservative investors, but any allocation changes should be based on asset allocation requirements, not short-term market movements.

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Which sectors could offer better opportunities after the fall?

With the correction bringing valuations down in parts of the market, investors may be tempted to identify sectors that could outperform in the next phase. However, both experts caution against making concentrated bets based purely on short-term opportunities.

An analysis by ETMutualFunds showed that in the current calendar year so far international funds have outperformed domestic mutual fund categories with 18.34% return. Among the domestic mutual fund categories, out of 20 mutual fund categories, three have offered double-digit average returns.

Auto sector based funds gave an average return of 17.99%, followed by pharma & healthcare sector funds and small cap funds delivering an average return of 17.49% and 13.01% respectively. Midcap funds delivered an average return of 7.19%, multi caps gave 5.42%, flexi cap funds gave 2.63% average return.

Three categories - technology sector based funds, contra funds and large cap funds lost 5.84%, 1.64% and 1.56% on an average in 2026 so far.

Minocha said that rather than seeking a “winning” sector, most investors benefit from diversified equity funds and if the economy continues to improve, sectors such as financials, manufacturing, capital goods, and select consumption themes may perform well, though this is conditional.

Overall, broad and well-diversified exposure is typically safer than making concentrated sector bets, he further said.

Pathak said that the correction has improved valuations in sectors such as banking, infrastructure, healthcare, and IT. He further said that investors should focus on diversified funds with exposure to these quality sectors instead of chasing short-term trends.

Triggers to watch over next 6-12 months

With the recent correction being driven by global uncertainty, elevated valuations following a strong rally, moderation in earnings, higher crude oil prices, FII outflows and cautious foreign investor flows, along with some valuation moderation. What are the main triggers investors should watch over the next 6-12 months before making any major portfolio change?

Pathak said that investors should track crude oil prices, geopolitical developments, FII flows, RBI and US Fed policy decisions, and corporate earnings, as these will influence market direction in the coming months.

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To this Minocha said that one should monitor corporate earnings growth, inflation trends, RBI policy decisions, global interest rates, geopolitical events, and domestic indicators such as GDP growth and consumption.

He further said that these factors influence long-term market direction more than daily volatility and portfolio adjustments should be guided by financial goals and asset allocation, not by market headlines or short-term fluctuations.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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