Lessons from 2017 market rally: Don't exit funds with sound track record

Many good schemes did not do well in 2017 because their fund managers were wary of investing in expensive stocks or those lacking in fundamentals

The year 2017 turned out to be among the best years since 2009, with the equity markets clocking returns in excess of 30 per cent. If the markets were buoyant, it could be safely concluded that mutual funds, too, had a great run. But this conclusion was put to the test in 2017. 

Liquidity-driven rally 

The stock markets closed both 2015 and 2016 on a sour note either on global concerns — China’s economic growth, the US elections, or Brexit — or domestic concerns like demonetisation. In 2017, both earnings and economic growth recovery were pushed back due to the lingering