Equity mutual funds amid market correction 2026: Should you stay invested or trim your portfolio? What history tells us
Market corrections can leave mutual fund investors wondering whether to stay invested or sell their investments to avoid further losses. However, an analysis by Abakkus Mutual Fund offers insights by examining the returns of the Nifty 50 Total Return Index (TRI) from April 2005 to September 2026.
The Nifty 50 TRI captures both price movements and dividends. It serves as a benchmark for many active equity mutual fund schemes and passive funds, such as index funds and ETFs, providing a comparable measure for investors to assess performance and decide their next move.
How far is the Nifty 50 from its peak?
As of 30 September 2026, the Nifty 50 stood at 22,716, up 1.7% from its March 2026 low of 22,331. However, it remained below its previous peak of 26,329, recorded on 2 January 2026, and required a further 15.9% gain to return to that level.
For mutual fund investors, this shows how market corrections are affecting their portfolio returns in 2026.
| Particulars | Nifty 50 Level |
| Previous peak (2 January 2026) | 26,329 |
| March 2026 low | 22,331 |
| Level on 30 September 2026 | 22,716 |
| Rise from the low | 1.7% |
| Gain required to regain the peak | 15.9% |
*Source: Abakkus Mutual Fund
According to the study, the benchmark index has experienced 13 corrections of 10% to 20% since its inception, or approximately one every three years. From the bottom of these corrections, the index recovered to its previous peak in around 91 days on average.
The longest recovery period followed the market crash in March 2025 and lasted until January 2026, when the Nifty 50 reached its previous all-time high.
What should mutual fund investors do?
Abakkus Mutual Fund’s analysis reveals how missing a few strong market sessions can affect long-term returns. Investors who stayed invested throughout the period from April 2005 to September 2026 recorded higher returns than those who missed some of the market’s best-performing days.
| Investment approach | CAGR from April 2005 to September 2026 |
| Stayed invested throughout | 13.19% |
| Missed the 5 best days | 10.86% |
| Missed the 10 best days | 9.31% |
| Missed the 30 best days | 4.31% |
| Missed the 50 best days | 0.66% |
*Source: Abakkus Mutual Fund; Nifty 50 TRI
Staying fully invested in the Nifty 50 TRI throughout this period delivered a CAGR of 13.19%. However, missing just the five best-performing days dragged the CAGR down to 10.86%. For investors who missed the best 50 days, returns flatlined to a CAGR of 0.66%.
The analysis highlights the potential cost of trying to time the market, as investors who exit during a correction may miss some of the strongest recovery days. These figures are based on the benchmark index and do not represent the returns of any specific mutual fund scheme.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.
