Don't fall for narratives; choose wisely, advises Radhika Gupta of Edelweiss Mutual Fund

Amid the ongoing market volatility and debate on small and midcap SIPs, one should not fall for narratives and should choose wisely, the CEO of Edelweiss Mutual Fund Radhika Gupta said. If one wants safety, then they should choose hybrid or debt mutual funds, she adds.

The CEO posted on social media, “Please don't fall for narratives and choose wisely. Want safety - choose hybrid or debt!”



Also Read | Bad times don’t last, good investors do: Radhika Gupta of Edelweiss Mutual Fund says

A common trend seen recently is investors are stopping their systematic investment plans (SIPs) in mutual funds as they are worried about the markets and are switching to index funds assuming that the latter are less risky, Gupta mentioned in her post after she received multiple posts and messages. However, this is a misconception that needs to be addressed, she added.

Gupta said that if an investor moves from an actively managed smallcap fund to a smallcap index fund, they are still exposed to the same level of risk—the volatility of small-cap stocks. The only additional risk in the active fund is with fund manager involvement, which could either underperform or outperform the index.

Explore | Higher-Yielding Alternatives to Fixed Deposits
“Sorry to break the myth that some strange articles have spread: index funds are not less risky. Buying an active small cap or small cap index fund is the SAME risk - that of small caps. The only additional risk in the active fund is manager performance (could also be outperformance),” the CEO posted.

Also Read | MF Tracker: Will the January topper continue to outshine throughout 2025?

In her earlier post, Radhika mentioned that in the ongoing market volatility, one should remember that bad times don’t last but good investors do. Though it might feel like hell now like it fell in 2008 and 2020 but one should remember that we have seen all that and have survived, she added.

The CEO has earlier said that SIPping is a marathon, and time makes a big difference so, let your SIP compound and never give up midway through your investing journey.