Market crash: Multi, flexi cap funds best for SIPs amid West Asia crisis

Home / Markets / News / Market crash: Multi, flexi cap funds best for SIPs amid West Asia crisis

Market crash: Multi, flexi cap funds best for SIPs amid West Asia crisis

Experts suggest that investors may consider initiating SIPs in diversified equity schemes such as multi-cap or flexi-cap funds amid market downtrend

Market crash today: Multi, flexi cap funds best for SIPs amid West Asia crisis

Abhinav Ranjan New Delhi

Listen to This Article

SIP investment plan: Market corrections often trigger panic selling, but wealth managers say such phases can offer opportunities for disciplined investors to accumulate quality assets through systematic investment plans (SIPs). According to experts, periods of volatility create opportunities for long-term investors to deploy funds more efficiently. Such investments during downturns enable investors to buy more units at lower prices, and this approach enhances long-term returns when markets eventually recover.

The strategy behind this is rooted in the concept of rupee-cost averaging. When markets decline, the same SIP amount purchases more units, which helps reduce the average acquisition cost over time.

According to AFI data, the SIP stoppage ratio in February reached 76 per cent from 74 per cent in January. As per data, around 65.72 lakh new SIPs were registered in the month, while about 49.70 lakh were discontinued or matured. It means that about three SIPs were closed or discontinued for every new SIP started in the month.

Experts said that SIPs work best for investors who have a long investment horizon and the ability to withstand short-term market fluctuations. Basically, SIPs allow investors to accumulate more units when markets fall and benefit from higher returns when markets rebound.

Focus on long-term

In the current environment, Gaurav Goyal of Canara Robeco Asset Management Company advised investors to focus on long-term structural growth opportunities rather than reacting to market moves.

“SIPs help investors build wealth over time by maintaining investment discipline. In the current market environment, SIP investors should focus on long-term structural growth areas rather than short-term market movements,” Goyal said.

Radhika Gupta, MD & CEO, Edelweiss Mutual Fund, said that markets fall but eventually recover faster. She said that markets fell 6-7 per cent after the 9/11 attacks but bounced back strongly, rising 14 per cent in the next few months. Similarly, markets crashed 7-8 per cent after the Iraq War in 2003, but recovered and rallied 15-16 per cent in the subsequent year.

Historical data: Stock market crash and recovery

On what's common in all geopolitical events, Radhika in a post shared on LinkedIn, said, "Events may be different, markets fall, but eventually they do recover."

She urged investors to look at the history. "We have seen a period when markets were flat for 18 months, and the next 18 to 36 months are very rewarding for investors with average returns between 12 and 30 per cent. So just don't give up yet."

Sensex, Nifty fall 8%

Notably, benchmark indices Sensex and Nifty 50 have slipped into the correction phase, falling more than 10 per cent from their respective highs. Since the start of the West Asia crisis, the BSE Sensex index has crashed more than 6,700 points or 8 per cent (data as on March 13 close). Likewise, the NSE Nifty index has lost more than 2,000 points or 8 per cent since the start of war.

'Volatility is feature of market'

On what investors should do now, Radhika advised them to do nothing. "You don't have the pressure to add if you don't want to. Don't make panic decisions. Is it time to go out and cancel an SIP? I will suggest, let the period ride out. Volatility is a feature of the market; it is not a bug. Nobody knows when geopolitical events will end, but we do know that over the long term, Indian equity returns have been in the range of 12 to 15 per cent."

Multi, flexi cap funds top experts' choice for SIP

Some experts, meanwhile, see this as an investment opportunity for those looking for long-term growth. They suggest that investors may consider initiating SIPs in diversified equity schemes such as multi-cap or flexi-cap funds, as these offer exposure to companies across different market capitalisations.

Akshat Garg, Head – Research and Product at Choice Wealth, said that attempting to time the market bottom can lead to missed opportunities. Instead, staying consistent with investments makes SIPs more effective. From a portfolio construction perspective, he said that large-cap and flexi-cap funds can form the core allocation for investors.

"These funds provide relative stability and give fund managers the flexibility to shift allocations across market segments based on emerging opportunities," he said.

Gaurav also echoed similar views as he said that "multi-cap or flexi-cap funds are best for investors who are considering initiating SIPs in such an environment."

"Categories such as flexi-cap funds and well-managed diversified funds are best to go for. In addition, a measured allocation to small-cap funds through SIPs can also be considered for investors with a longer time view," Sahil Kapoor, head, products, 360 ONE Wealth, said.

Sectoral funds SIP

On the sectoral themes, Garg believes that financial services, capital expenditure, manufacturing and domestic consumption continue to offer long-term growth potential.

“The overall strategy should be simple: maintain SIP discipline, diversify across market caps, and stay invested with a long-term perspective rather than reacting to short-term market movements,” he said.

Harish Krishnan, CIO, equity at Aditya Birla Sun Life AMC, said that markets never move in one direction and the best opportunities are created in volatility. He said that stopping SIPs during downturns can be counterproductive.

Historical trends suggest that downtrends due to geopolitical tensions are typically temporary, with markets eventually returning to fundamentals such as earnings growth, liquidity conditions, and domestic demand.

On how to navigate market volatility while staying focused on long-term wealth creation, he said, "Investing through large-cap and flexi-cap funds remains well-positioned for investors." =======================

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Mar 16 2026 | 2:32 PM IST