SIP crisis: Rs 25 lakh crore wealth wiped out in just 6 days – Why SIP returns are going negative and what investors must do now?

Negative SIP, What to Do with Your Mutual Fund Investment: The ongoing war between Iran, Israel, and the US has severely impacted equity market sentiment. Investors have lost more than Rs 25 lakh crore in the stock market in just six days. Between March 2 and 9, 2026, the market cap of BSE-listed companies declined by more than ₹25 lakh crore. The market was closed on March 3 for Holi and on March 7 and 8 for the weekend.

This market decline is now impacting mutual fund returns. Not only are 3-month and 6-month returns turning negative, but 1-year returns for many funds have also turned negative. It's uncertain how long the war will last, and this has increased the tension among mutual fund investors. Given the daily losses, the question arises as to what their investment strategy should be.

How the market cap decreased in 6 days

Equity funds with negative returns of more than 12 per cent over 6 months

Avoid withdrawing based on market hype

If this happens, there's no need to panic and withdraw from your investment. A lump sum investment (SIP) in a mutual fund is a long-term investment, while the stock market is volatile from time to time. If you withdraw money in a hurry due to a short-term loss, you could lose the gains you would have made when the market recovers.

When your SIP turns negative, the first step is to compare your fund's performance with other funds in the same category. If most funds in that category are also falling, it means the problem may be due to the overall market, not just your fund. It's also a good idea to compare funds across different categories. This helps you understand the bigger picture of the market.

Diversify your investments

Diversification is essential to reduce investment risk. If a large portion of your SIP funds is invested in a single sector or category and is incurring losses, it may be better to spread your investments across different sectors or asset classes. This can reduce risk.

Understand the balance between risk and return

When investing in a lump sum or SIP in mutual funds, it's important to understand the balance between risk and return. Generally, the potential for higher returns comes with higher risk. If you understand this, you can maintain a calm and balanced mindset even during market downturns.

Markets recover after a downturn

History shows that the stock market typically recovers over time. If your SIP is negative today, it doesn't mean it will remain so forever. By being patient and continuing to invest, you can benefit from future market growth.

Review your investments regularly

Review your investment strategy periodically. This doesn't mean reacting to every small market fluctuation; rather, it's best to carefully review your SIP portfolio at least once a year.

SIP Pause: This option is available in case of a significant decline

SIP pause is a feature in mutual funds that allows you to pause your SIP for a few days instead of stopping it if you face a sudden financial crisis. Some fund houses offer this feature for up to 6 months. Later, if the situation improves, you can continue. This means your SIP won't stop; you're essentially extending it for another 6 months to achieve your goal.

If you also want to avail yourself of the SIP pause feature, you can inform the asset management company through which you invested via email.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)