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Be Watchful

Use a fund’s rating to keep an eye on the fund. Consider exiting only when the rating keeps slipping…

I have invested in a highly-rated fund, but after 5 years of investment, the fund's rating has been downgraded. What are my options now? My investment horizon is a 15 years.
- Prabhat Patel

Rating is only one of the criteria that are to be used to select a fund. Use the rating to review a fund; be watchful if the fund has slipped in its rating. A rating downgrade certainly means that the fund has been doing poorly on a relative basis, but it doesn't necessarily mean that you should immediately sell the fund. A fund can have an interim period of underperformance. Think about exiting the fund only if its rating keeps slipping.







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