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Cut Losses, Move Ahead

You might miss out on better opportunities if you keep waiting for Magnum Balanced to fare better…

I started SIP investments of Rs 1,000 in March 2010 in Magnum Balanced Fund. So far I have invested Rs 20,000 which now worth Rs 18,295. Should I redeem or switch to another fund?
- Duwara

Magnum Balanced is 2-star equity-oriented hybrid fund which has not been amongst the best performing fund in the category. The fund has earned annualised 18.25 per cent returns over the past three years and 7.02 per cent annualised returns in the past five years, when several of its peers have managed to fare better. You will be missing out on other opportunities if you are waiting for notional gains in this fund and waiting for it to improve. It will be better for you to cut your losses and exit this fund and invest in some other fund. The lesson for you from this investment is to regularly track the performance of your investments; this way you can note the dip in their performance in comparison to the benchmark and its peers. Moreover, when investing in mutual funds, select funds that are highly rated and have a proven track record and history.

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