16/08/2026
Why Can an Equity Mutual Fund Deliver Flat Returns for 2 Years?
For example, why might an equity mutual fund such as Parag Parikh Flexi Cap Fund experience a period of relatively flat performance?
Here are some factors investors should understand:
1️⃣ Investment approach takes time
A value-oriented approach may take time to play out. Fund managers may invest based on business quality, valuations and long-term fundamentals rather than short-term market momentum.
2️⃣ Global exposure can affect returns
Funds with overseas investments can be affected by international markets, currency movements and global economic conditions.
3️⃣ Equity markets don't move in a straight line
Even equity funds with a long-term investment approach can experience periods of weak or flat performance.
4️⃣ Look beyond a short period
Equity investing is generally intended for the long term. PPFAS itself describes its long-term horizon as 5 years and more.
The key lesson:
A short period of weak performance alone doesn't tell you whether an investment strategy is good or bad. Investors should examine the fund's objective, portfolio, risk, benchmark, costs and long-term performance before making decisions.
Educational content only. This post is for general financial education and is not investment advice or a recommendation to buy, sell or hold any security or mutual fund. Please conduct your own research or consult a SEBI-registered investment adviser before making investment decisions.
