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Exiting a Fund

There is no right or wrong time to invest in funds, but there are triggers to consider when to exit…

I am new to mutual fund investment and want to know when is it right to exit a fund?
-Ketan Likhate

Exiting a fund is as important as investing in the right fund. Just the way there is no right or wrong time to invest in a mutual fund, there is no right time to exit a fund. However, there are a few triggers when one should consider adopting an exit strategy with their mutual fund investments. First; if there is a change with the fund manager and you are not happy with the way the new fund manages the fund, it is wise to exit the fund. Likewise, when there is a change in the investment mandate or style of the fund, then it may no longer be a fit in your portfolio. Next, if the fund consistently under performs on its own, compared to peers and within the category; you should exit the fund. However, do not let one month of bad performance make you change your mind. If the investment has achieved its goal, you should exit the fund as you should while rebalancing your investment portfolio. Lastly, you should exit the fund if you need the money and do not have any other recourse.



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