My mutual funds are giving negative returns; should I continue?

I am 32 years old and I am investing Rs 50,000 per month in the following mutual funds:
Kotak Standard Multicap Fund: Rs 15,000
HDFC Mid-Cap Opportunities Fund: Rs 5,000
HDFC Small Cap Fund: Rs 10,000
HDFC Hybrid Equity Fund: Rs 10,000
Motilal Oswal Long Term Equity Fund: Rs 5,000
L&T Emerging Businesses Fund: Rs 5,000

I have been investing for the past two years and all these schemes are giving negative returns. Should I continue to invest in these schemes? I am planning to invest for five to seven years. My risk appetite is moderate. Please suggest.
--Prajwal Mishra

Prableen Bajpai, Managing Partner, FinFix Research & Analytics, responds:

Your mutual fund portfolio has a mid cap, multi cap, hybrid, ELSS, and two small cap mutual funds. Considering your risk appetite and your investment horizon of five to seven years, you should reconsider your investments in HDFC Small Cap Fund and L&T Emerging Businesses Fund. Both these schemes belong to the small cap space and they must be held for a longer period. You may consider exiting these two schemes, and instead increase your allocation to Kotak Standard Multicap Fund and HDFC Hybrid Equity Fund, respectively.

You have also invested in a tax-saver from Motilal Oswal Mutual Fund. Each SIP instalment in this scheme will be locked for three years. If you do not need a tax-saver, you can switch to an open-ended equity fund from the same fund house. An investment of Rs 50,000 per month over the next seven years should help you to generate nearly Rs 61 lakh, assuming an annual return of 10%.