How do we decide when to exit a particular fund?

POSTED BY Kavita ON October 21, 2010 12:47 pm COMMENTS (6)

How do we decide when we should exit a particular fund, How do we decide a bad performance of a fund and how many months should we wait to see if the performance changes.

Are there any other parameters to look for before exiting a MF.

6 replies on this article “How do we decide when to exit a particular fund?”

  1. Also, review your portfolio once in a year. Less than a year is not a right strategy to judge any fund. A particular time may be good or bad for some stocks or even fund manager. So, don’t compare funds for 3 months or 6 months time frame.

    Hope it will help you.
    Investmentkit.com

    1. Kavita says:

      Thanks Moneysavings help,

      How much fall should be there or what are the parameters to judge a bad performance of fund, I understand what Saravanan said that u have to compare with benchmark or peers etc..but how much difference is allowed if the fund is in a short term bad phase etc.. I hope you understood what i am trying to ask.

      How many months should you wait to decide to exit a fund which is not performing well

      1. Compare with other peer products in the same category as stock market is same for both the funds. If it’s a difference of just 5% – 6% in a year, it’s ok. Some months may be good for one fund, and some may be good for other. But of the difference is HUGE, like one fund is giving 35% return and the other one is giving 10%, it should be an alarming signal for you.

        The following article will also help you.
        http://www.investmentkit.com/articles/2010/08/when-should-you-exit-your-mutual-fund-investment/

        1. Kavita says:

          Thanks again, I guess now I understand.

  2. saravanan says:

    one way is to look at how the fund has performed against its benchmark, and the performance of peer funds vis-a-vis that benchmark… number of months to review would be a personal call…

    1. Kavita says:

      Thanks Saravanan…..

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Download Our FREE Ebook!

Available only for first 100 people today

Download Our FREE Ebook!

Available only for first 100 people today