Types of Mutual Funds: What Are Different Types of Mutual Funds, How They Differ, and How to Invest in Them
Investing
Jan 10, 2025
Seven weeks. That’s how long the Nifty 50 has been sliding, and in the process it has erased close to $250 billion in market value and dropped under its 200-day moving average for the first time in six years. The Sensex is having its worst stretch since the dot-com years.
It isn’t one event causing this, it’s several landing together. Oil prices are climbing at a bad time for an economy that imports most of what it burns. Bond yields worldwide are rising, drawing money out of markets like India’s. Indian equities also lack the AI-linked names that have kept other markets attractive this year. And a softer rupee is quietly shrinking what foreign investors actually take home in dollar terms. Put together, overseas investors have withdrawn close to $26 billion from Indian stocks this year, including a single day where FIIs sold over ₹5,300 crore, hitting large names like HDFC Bank, ICICI Bank and Reliance.
September’s derivatives expiry closed at 22,716 — down 6.6% from August and the weakest month since March. Foreign investors sold roughly ₹34,600 crore of shares in September alone, while domestic mutual funds bought nearly ₹57,800 crore, cushioning much of the fall.
Valuations have come down with the market. Fewer BSE-listed companies now trade above 40 times earnings than two years ago. But a lower price tag doesn’t automatically mean a better deal — part of this drop is stretched valuations correcting, and part of it is company earnings actually disappointing. Those call for different responses, not the same one.
None of this calls for panic. It also doesn’t call for doing nothing. It calls for checking the right thing.
| Index | 30 Sept 2024 | 30 Sept 2026 | Change |
| Nifty 50 (India) | 25,810 | 22,620 | −12.4% |
| S&P 500 (US) | 5,762 | 7,684 | +33.3% |
| TAIEX (Taiwan) | 22,225 | 47,940 | +115.7% |
| KOSPI (South Korea) | 2,593 | 6,838 | +163.7% |
Closing prices, local currency. S&P 500 latest figure is the 29 Sept close.
The other side of the story
Two facts rarely make the headlines.
First, someone is buying. While foreign investors sold, domestic mutual funds put ₹57,806 crore into equities in September.
Second, prices have cooled. Two years ago, 36% of BSE-listed companies traded above 40 times earnings. Today, it is 26%. Some of that is froth leaving. Some of it is companies earning less than expected. The difference matters. A stock that fell because its earnings fell is not a bargain just because its price is lower.
What to actually do
Check the goal, not the index
If you need the money in the next two or three years, it should not have been fully in equity to begin with. If your goal is ten years away, your plan should already expect a fall of this size.
Check your allocation
Has the fall pushed your equity share below what your plan calls for? Bringing it back is a planned move, not a bet on the bottom.
Keep your SIPs running
Stopping now means buying less when prices are lower, the exact opposite of what SIPs are built for.
We have been here before
| Crisis | Fall (record close to lowest close) | Time from low to new record |
| 2008 financial crisis | −59.9% | ~2 years |
| 2020 COVID crash | −38.4% | ~7.5 months |
| 2021–22 rate hikes | −17.2% | ~5 months |
| 2026 (so far) | −15.2% | Not yet recovered |
Nifty 50 closing prices.
Don’t buy just because it’s cheaper. Buy because it fits your plan.
Where advice helps
The hardest part of a falling market is not the maths. It is sitting still when every headline says move. A qualified financial advisor helps with both: checking whether your allocation still fits your goals, and keeping you from decisions you will regret when the cycle turns.
At 1 Finance, our SEBI-registered advisors build plans around your goals, not around this month’s market.
Markets wither. Plans shouldn’t.
SEBI RIA Registration No: INA000017523 | 1 Finance Private Limited
