How to Turn Around Your Equity Funds Portfolio for Positive Returns in 2023

Learn how to turn around your underperforming equity investments with these expert tips for Indian investors in 2023.

Equity Funds

Equity funds have been one of the most the popular investment choices for retail investors over the years. However, the year 2022 has not been a good year for equity funds as they failed to deliver expected returns. Many investors who had put their faith in equity funds are now feeling disappointed and unsure about how to proceed. But there is a way to turn things around.

Let’s quickly discuss why equity funds have disappointed in 2022 and how investors can navigate this situation.

What Went Wrong with Equity Funds in 2022? Meet the top 3 bad performance contributors.

  • Market Volatility: The market was volatile in 2022 due to the pandemic and other global events. This volatility affected the performance of equity funds as they are directly linked to the stock market.
  • Inflation: Inflation was high in 2022, which affected the profitability of companies. As equity funds invest in the stock of these companies, the impact of inflation was felt in the returns of equity funds.
  • Regulatory Changes: Regulatory changes also affected the performance of equity funds in 2022. For example, the new rules on margin trading affected the performance of equity funds as it reduced liquidity in the market.

Also Read: Best Investment Option in 2023 for all income groups. 

Navigate the Equity Fund Disappointment, unhurt. 

If you have invested in equity funds and are disappointed with the returns, here are some things you can do to navigate the situation:

  • Reassess Your Investment Goals: Start by reassessing your investment goals. If your investment goals are long-term, you should continue to hold on to your equity fund investments. However, if you have short-term goals, you may need to reconsider your investment strategy.
  • Consider Liquid Funds: If you need immediate liquidity, you can consider investing in liquid funds. These funds invest in short-term debt securities and offer better liquidity than equity funds.
  • Systematic Transfer Plans (STPs): If you want to move your money from equity funds to fixed-income funds, you can use STPs. STPs allows you to transfer your investments from equity funds to fixed-income funds in a systematic manner over some time.
  • Hybrid Funds: You can also consider investing in hybrid funds. These funds invest in both equity and fixed-income securities and offer a balanced portfolio.
  • Foreign Portfolio Investments: You can also diversify your portfolio by investing in foreign portfolio investments. These investments are made in stocks and bonds of foreign companies and can provide higher returns than domestic equity funds.

Learn from an expert: 

According to Mr. Ajay Tyagi, Executive Vice President and Fund Manager, of UTI Mutual Fund, "Equity funds are a long-term investment and investors should not be swayed by short-term volatility. The current situation is temporary and investors should stay invested for the long-term to reap the benefits of equity funds."

Softening the blow further for Investors:

Investors can take steps to improve their equity investments by reassessing their portfolios and considering options like liquid funds, STPs, hybrid funds, and fixed-income options.

Consumers who are invested in equity funds can take steps to mitigate risk and improve returns by considering balanced investment approaches and keeping an eye on global market trends.

Our Conclusion:

Equity funds have been disappointing in 2022, but investors should not panic. By reassessing their investment goals, diversifying their portfolio, and staying invested for the long term, investors can navigate the equity fund disappointment and continue to achieve their financial goals.



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