I want to simplify my mutual fund portfolio. Should I redeem or switch from funds where the SIP is stopped to funds where the SIP is still continuing? Is the 1 per cent exit load applicable on redeeming funds as well?
- SN Mohapatra
The 1 per cent exit load is applicable on the redemption of any SIP installment that is not 365 days old. So any investments that have been made in the past 12 months will face a 1 per cent exit load if redeemed now.
But before you decide to discontinue any SIPs, you should remember that the primary reason for exiting a fund is sustained underperformance. Don't get disappointed by the recent performance of funds that have impressive track records, because the markets have generally been hostile. Ideally, equity investments should be for a defined timeframe of over 3 years.