Should you sell an underperforming mutual fund?

No, underperformance doesn't always mean you should exit. The article explains that even top-performing funds underperform 30–50% of the time, and reactive selling often backfires. Instead, focus on long-term strategy and avoid timing the market, as shown in the 'reactive investor' experiment.

How does fund size affect mutual fund returns?

Fund size and AUM can cap returns, with larger funds often underperforming due to dilution of alpha. The article highlights that fund size is a red flag, and investors should prioritize funds with manageable AUM to avoid muted growth.

What are the red flags for corporate governance issues in mutual funds?

Corporate governance issues and fund manager changes are critical red flags. The article warns that these factors can signal instability, and investors should monitor them closely before committing to a fund.

What is the tax impact of switching mutual funds?

Switching mutual funds incurs hidden tax costs that most investors overlook. The article emphasizes that frequent switching can erode returns through capital gains taxes, making it a key consideration in portfolio management.

How many mutual funds should you hold in your portfolio?

The article argues that more funds aren't always better. It recommends a disciplined approach using the core vs. satellite framework, suggesting 3–5 funds is optimal to balance diversification and management complexity.

What are the three questions to pick the right mutual fund?

The article outlines three key questions: assess the fund's philosophy, check its size and AUM, and evaluate hygiene factors like governance. These criteria help filter funds that align with your long-term goals and risk tolerance.

[Podcast] Is There Even a Best Mutual Fund to Invest in 2026?

Most investors obsess over finding the best mutual fund to invest in. But what if avoiding the worst fund matters far more than picking the absolute best?

In this episode, host Shrey Chandra sits down with Deepak Shenoy (Founder & CEO, Capitalmind Mutual Fund) and Anoop Vijaykumar (Head of Equity & Fund Manager, Capitalmind Mutual Fund) to tackle one of the most searched questions in personal finance: how to pick mutual funds that actually deliver long-term returns — without constantly second-guessing your choices.

Using 10 years of FlexiCap fund data across 18 funds, they reveal why even top-performing funds underperform 30–50% of the time — and why that’s completely normal. They also run a “reactive investor” experiment that shows exactly how timing the market destroys returns, and what a disciplined mutual fund portfolio strategy looks like instead.

What you’ll learn:

The core vs. satellite portfolio framework and how to allocate across funds smartly
Why mutual fund underperformance doesn’t always mean you should exit — and when it does
How fund size and AUM can quietly cap your returns — and the red flags to watch
Corporate governance issues and fund manager changes as early warning signs
The hidden tax impact of switching mutual funds that most investors never calculate
When multi-asset mutual funds make sense as a simplified core holding
How many mutual funds you should hold — and why more isn’t always better
3 questions to ask before picking any fund — covering philosophy, size, and hygiene checks

Chapters:

0:00 – Intro

1:50 – Introduction to the topic: What’s the best mutual fund?

2:22 – Anoop begins: How to think about picking a mutual fund

3:26 – Analysis of FlexiCap funds over 10 years (18 funds compared)

5:15 – Avoiding the worst funds vs. picking the best

5:35 – Rolling underperformance data - what it reveals

7:07 – Even good funds underperform 1/3 to 1/2 of the time

8:09 – Should you sell an underperforming fund?

8:28 – The “reactive investor” experiment - timing the market backfires

9:51 – What to do before and after investing in a fund

12:07 – Argument for style diversification across funds

13:50 – Two types of successful investors

15:39 – Do multi-asset funds simplify everything?

17:45 – Deepak joins: How many mutual funds should you hold?

20:00 – Core vs. satellite portfolio framework

24:44 – Multi-asset funds as a core holding

28:45 – Can you predict the worst funds? (Size, AUM issues)

31:35 – Corporate governance & fund manager changes as red flags

33:59 – Tax impact of switching funds - often overlooked

39:41 – Three questions to pick the right fund for you

49:46 – Expense ratios: are they really that important?

55:13 – Final framework: philosophy, size, hygiene checks

59:48 – Closing thoughts

If you’ve ever wondered why your mutual fund is underperforming or made the common mutual fund mistakes of chasing last year’s top fund or switching too frequently — this conversation will reframe how you think about investing entirely.

Whether you’re a first-time investor or managing a mature portfolio, this is the clearest framework we’ve put out on mutual fund selection in India.