New Delhi, Oct. 21 -- I bought a mutual fund because it was one of the top performers when I invested. It has since underperformed for two years. How do I distinguish between a temporary period of underperformance and a fund that genuinely no longer belongs in my portfolio?

Choosing a mutual fund can be overwhelming, and investing in a top performer may seem like a natural starting point. However, strong past returns do not guarantee future performance.

Our analysis of mutual fund performance over 13 years found that, on average, only 36% of the best-performing funds in one year remained among the top performers the following year. It is normal for funds to lose their rankings, so underperformance alone is not a reason to panic or exit....