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.

    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.

        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…..

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