mumbai equity schemes continue to be in negative territory during the last one year according to data culled from valueresearch an independent mutual fund tracking firm the mid and smallcap category seem to be the worst hit interestingly thematic schemes like pharma and fmcg have fared better than diversified and tax planning schemes banking and auto schemes have also done better than themthe midcap category has posted an average return of 6319 and the smallcap schemes returned an average of 6473 this would mean that investors who have put in rs 100 in the category would have seen their capital eroded to rs 3685 in the midcap and rs 3527 in the smallcap category no it is not the fault of your fund manager the bse midcap index has fallen 65 in the last one year whereas the smallcap index was down by 67 in the same period investors who have put their money in sectoral schemes like pharma and fmcg must be feeling proud as these sectors have been least hit by the current economic turmoil see table category average returnsi wouldnt be worried by the performance of small and midcap schemes if the investor has invested the money as per his asset allocation plan says hemant rustagi ceo wiseinvest advisors a wealth management firm savvy investors often allocate a small percentage of their total equity investment towards sectoral and small and midcap schemes but if they have invested in these schemes because they were the pet theme at that point they should use this opportunity to reflect on their actions and take remedial steps according to financial advisors most investors tend to put in their money in schemes which are in the limelight without understanding the nature of the schemeif you have invested in small or midcap scheme you should realise that they are extremely volatile and they suffer the most when there is a bear market says a mutual fund manager only investors with a longterm horizon of five to 10 years should invest in them that fetches a question how long will these two categories take to recover according to financial experts both the sectors are likely to languish at least for the next two years considering the current economic situation i think these segments will take at least two years to recover says rustagiwhat should investors do they should realign their portfolio if they have put the money in these categories without giving it a proper thought they should take the money out and park it in a largecap fund or a diversified fund with a largecap basis says rustagi they can look for schemes within the same fund house as they can save on costs however they must make sure that the scheme is comparing well with its peers and it has been a consistent performer