Mutual fund portfolio down Rs 1.5 lakh in 12 days. Is the decline due to regular plans or market volatility?

Recent fluctuations in mutual fund portfolios have led investors to reassess their investment choices, particularly regarding regular versus direct plans. A case in point is Vijay, a 43-year-old IT professional from Haryana, whose mutual fund portfolio, valued at approximately Rs 31 lakh, recently saw a decline of Rs 1.5 lakh in just 12 days. This decline prompted him to question whether his regular plans were to blame. Financial experts clarify that such short-term losses are typically influenced more by market volatility and global economic factors rather than the type of mutual fund plan. Vijay's portfolio, which consists entirely of regular plans from SBI Mutual Fund, presents a concentration risk, as all his investments are with a single asset management company. Experts recommend diversifying across different fund houses to mitigate risks. Vijay is considering restructuring his portfolio, planning to allocate funds to a mix of flexi-cap, midcap, global equities, and gold, while continuing his SIP investments. He aims to build a corpus of Rs 1 crore in five years. Financial advisors encourage Vijay to avoid rash decisions, suggesting a thoughtful approach to diversification rather than an immediate redemption of his current investments.