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Ramalingam Kalirajan |11390 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 09, 2026

Ramalingam Kalirajan has over 26 years of experience in MF distribution and wealth management. He holds an MBA in Finance from the University of Madras and is a CFP (Certified Financial Planner) credentialed professional. He is the Director of Holistic Investment, a Chennai-based AMFI-registered Mutual Fund Distribution (ARN-4188) and APMI-registered PMS Distribution firm (APRN07386), helping clients build long-term wealth through mutual funds and other investment solutions.... more

Asked by Anonymous - Jun 18, 2026

HDFC NIFTY 100 LOW VOLATILITY 30 INDEX DIRECT GROWTH is this fund worth continuing nearly 2 years no improvement sir

Ans: » Your Concern Is Understandable

– Two years is not a very short period.
– So it is natural to question the investment when returns are disappointing.
– Most investors would feel the same.

– The important thing is not to look only at the fund name.
– We need to understand what the strategy is designed to do.

» Understanding Low Volatility Strategy

– A low volatility index strategy focuses on stocks that fluctuate less.
– The objective is to reduce ups and downs.
– It is not designed to be the highest-returning category.

– During strong bull markets, such strategies can lag behind broader market segments.
– This often frustrates investors who compare returns with more aggressive categories.

– Therefore, underperformance for a period does not automatically mean the strategy is bad.
– It may simply be behaving as designed.

» My Concern About Index Funds

– Since this is an index fund, it follows a predefined index.
– There is no active fund manager making decisions.
– The fund must hold stocks as per index rules.

– If certain stocks become expensive, the fund still follows the index.
– There is limited flexibility.
– There is no active effort to avoid weak sectors or expensive stocks.

– In actively managed funds, fund managers can:

Increase exposure to attractive opportunities.
Reduce exposure to overvalued sectors.
Move between market segments.
Respond to changing market conditions.

– This flexibility can add value over long periods.

» Should You Continue?

– The answer depends on why you invested.

– If you invested:

For lower volatility,
For stability,
For a specific asset allocation,

then the fund may still be serving its purpose.

– If you invested expecting high growth and market-beating returns, then the fund may not be matching your expectations.

– Investment success is not only about holding for a long time.
– It is also about ensuring the investment matches the objective.

» Before Taking Any Exit Decision

– Review the fund's performance against its own category and objective.
– Review your overall portfolio allocation.
– Check whether this investment is a core holding or a small allocation.
– Consider tax impact before redeeming.

– If units are held for more than one year, equity mutual fund taxation rules will apply.
– Long-term capital gains above Rs 1.25 lakh in a financial year are taxed at 12.5%.

» Finally

– Two years of weak performance is enough reason to review.
– But not enough reason by itself to exit.
– The bigger question is whether the fund still fits your goal.

– Personally, I prefer actively managed funds over index-based strategies because active fund managers can adapt to changing market conditions.
– A low-volatility index fund may provide smoother journeys, but it may not always deliver the growth many investors expect.

– Review the role of this fund in your portfolio first.
– If your goal is long-term wealth creation, a well-managed active fund may deserve stronger consideration than a passive low-volatility index strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

AMFI-Registered MFD – ARN 4188

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/

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