A mutual fund SIP showing a loss can make every monthly instalment feel like a mistake. But a negative return answers only one question: what your investment is worth today compared with what you have put in. It does not, on its own, tell you whether the fund is poorly managed or whether its market has had a difficult period.

In a Moneycontrol interview published on September 21, 2026, DSP Mutual Fund investment strategist Sahil Kapoor urged investors to examine the reason for weak returns before stopping a systematic investment plan. His central point is practical: a temporary market decline and a lasting problem with a fund call for different decisions.

A disappointing SIP return is a reason to review, not panic

Kapoor cited a DSP historical study in which 95% of the ten-year SIP journeys examined encountered a difficult period during their first five years, while 81% showed a negative return at some point. The study also reported much stronger outcomes for most of the SIPs that completed the full period.

Those figures describe the investments and time periods selected for that study. They do not mean a new SIP has a 95% chance of struggling or a 99% chance of beating a fixed deposit. Future results depend on the fund, when contributions are made, market conditions, costs and how returns are measured. Past performance cannot guarantee an investor’s eventual return.

A useful first check is whether comparable funds and the scheme’s benchmark have also fallen. If most of the category is weak, the loss may reflect a broader market cycle. If one fund persistently trails suitable peers while taking similar risks, its investment decisions deserve a closer look.

Short of cash? Consider the two decisions separately

Stopping future SIP instalments and redeeming units already purchased are separate actions. If income falls or an emergency expense arises, continuing a monthly investment at the expense of essential bills may be impractical. Kapoor suggests that an investor who needs breathing room can consider pausing new contributions while assessing whether the existing investment still fits the original goal.

Redeeming units provides cash now, but it may also turn a temporary decline into a realised loss. That does not mean investors must avoid withdrawals in an emergency. The right choice depends on how urgently the money is needed, what other savings are available and whether the fund was intended for a long-term goal.

Before taking either step, check the scheme’s exit load, any applicable tax consequences and the effect on your wider portfolio. An emergency fund can reduce the need to sell an equity investment at an inconvenient time.

Four signs that a fund may need more than patience

A year of poor returns is a limited basis for judging an equity fund. A fuller review becomes useful when one or more of these issues appears:

1. The fund’s objective or investment style changes. Its holdings may no longer match the reason you chose it or the risk you intended to take.
2. A key fund manager leaves. This matters most when the fund’s approach depended heavily on that person’s decisions. Review what changes under the new manager.
3. Underperformance persists for identifiable reasons. Compare the fund with an appropriate benchmark and peers over a meaningful period, and look at the decisions behind the results.
4. Your portfolio has become too concentrated. Several funds may hold many of the same stocks, leaving you with less diversification than their different names suggest.

Kapoor highlighted overlap as a particular concern for investors adding funds alongside a flexicap scheme. The overlap percentages quoted in the interview are averages from DSP’s analysis; your own holdings may look quite different. Compare the actual portfolios before buying another fund simply to increase the number of schemes you own. Moneycontrol’s interview with Sahil Kapoor.

Be careful when switching to a recent winner

A fund’s striking return over the past one or two years can be tempting when your SIP is struggling. Yet buying solely because a scheme has just performed well can mean entering after much of its gain has occurred. Ask what drove the return, whether the fund’s holdings and risk suit your goal, and whether it adds anything useful to your current portfolio.

The decision is rarely just “continue” or “sell everything.” You can review the fund, adjust future contributions, pause an SIP during a cash shortage, or redeem units when your needs genuinely change. Start with your time horizon and the reason for the loss; then decide whether the fund still has a place in your plan.