Correction in banking, financial funds: Exit if unable to handle volatility
Published by Business Standard
Abhishek Kumar's role: Quoted
Abhishek Kumar said investors may stay if their view on India's credit growth holds, suggested exiting if overweight or if goals are met early, and recommended staggered entry with a five- to seven-year horizon.
What Abhishek Kumar said
Should I stay invested in a banking and financial services fund after a correction?
The financial sector often leads market recoveries and is a key beneficiary when the domestic economy expands. So if the reason you invested, your view on India's credit growth, still holds, I suggest you continue with the investment. A fall in the fund by itself is not a reason to change that view.
When does it make sense to exit a banking and financial services fund?
I would consider exiting when two things are true: your portfolio is heavily overweight on the banking and financial services sector, and you have already reached your personal goals earlier than planned. In that situation you no longer need to carry the extra exposure to one sector, and moving out of it fits your plan.
How should a new investor enter a banking and financial services fund?
I suggest staggering your investment through systematic plans instead of putting in a large sum at one go. Spreading the entry over time helps reduce the impact that near-term swings in interest rates and uncertainty in the global economy can have on the price at which you buy in.
How long should I plan to hold a banking and financial services fund?
For this sector I recommend staying invested for at least five to seven years. I pick that range because it mirrors the economic cycle, and staying invested for a duration of this length can help you ride out the credit cycles that banking and financial businesses go through.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on mutual funds
Banking and financial services funds fell sharply over a month in March 2026 amid war-related macro risks and asset-quality worries. The article sets out the reasons for the fall, the sector's strengths, when existing investors might stay or exit, and how new investors could approach these sector funds.
Publisher source
Correction in banking, financial funds: Exit if unable to handle volatility