1⃣. The fund is consistently underperforming
Even the best of funds tend to have a few bad quarters. That is why it is always better to focus on 3 to 5 yrs returns on mutual funds to evaluate them effectively.
Even the best of funds tend to have a few bad quarters. That is why it is always better to focus on 3 to 5 yrs returns on mutual funds to evaluate them effectively.
If your equity MF is yielding lower than an index fund, then you are earning negative yields on your market risk which does not make sense.
There are occasions when the fund returns have been too volatile that defeats the purpose of MF investing.
Here you must look to EXIT.
There are occasions when the fund returns have been too volatile that defeats the purpose of MF investing.
Here you must look to EXIT.
2⃣. You are not satisfied with the fund manager's decisions
Your fund manager has decided to change the objectives of the fund or you may observe that the view/decision taken by him is consistently wrong, leading to underperformance, you should be alert.
Your fund manager has decided to change the objectives of the fund or you may observe that the view/decision taken by him is consistently wrong, leading to underperformance, you should be alert.
When you have genuine reasons to believe that these decisions are not in your larger interest, it makes sense to EXIT the fund.
3⃣. The desired goal has been achieved or it is not meeting up to the goal
This is slightly more unique to you and your individual goals. The whole idea of financial planning is about making investments to meet your goals.
This is slightly more unique to you and your individual goals. The whole idea of financial planning is about making investments to meet your goals.
For example: If you have made an investment to meet the margin money payment for your home purchase, then it makes sense to liquidate your mutual fund and use it up for the purpose it was intended for.
Also, there are cases when your MF investment is compromising your goals.
Here you may EXIT that particular mutual fund holding and look for alternative investments to achieve your goal.
Here you may EXIT that particular mutual fund holding and look for alternative investments to achieve your goal.
4⃣. The Core philosophy of the fund may have changed
These could happen due to a variety of reasons like an AMC may decide to sell out its business to another Mutual fund house or it may decide to reclassify the scheme.
These could happen due to a variety of reasons like an AMC may decide to sell out its business to another Mutual fund house or it may decide to reclassify the scheme.
These are all cases where the core objective and features of the fund may be changing. If you are not comfortable with this shift, you must seriously consider exiting the fund.
5⃣. It is time for you to rebalance your portfolio
There are genuine reasons to rebalance your portfolio. You may have crossed the age of 50 and there may be a genuine need for you to reduce your overall exposure to equities.
There are genuine reasons to rebalance your portfolio. You may have crossed the age of 50 and there may be a genuine need for you to reduce your overall exposure to equities.
Another reason could be the macro situation that favours large-cap stocks over mid & small caps frm a secular perspective
Here u need to rebalance ur portfolio by selling a few funds and adding others that sync with your long-term goals
Hit re-tweet to educate more investors!
Here u need to rebalance ur portfolio by selling a few funds and adding others that sync with your long-term goals
Hit re-tweet to educate more investors!
Learn more such information on Mutual fund investment through our Complete guide on Mutual Fund Course on Quest - bit.ly/quest-mutualfu…
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