I want to discontinue my Systematic Investment Plan (SIP) in a fund because its performance is not up to the mark. But I don t want to redeem the investment now. I will give it a chance and see whether it can give better returns on my investment in it. Alternatively, I will start a SIP in another fund in the same category. My questions are:
1) Can I discontinue SIP and keep the money invested as long as I wish?
2) Would the AMC recover any additional charge for this (although I am not redeeming my investment now)?
- Indrajit Ghosh
Yes, you can discontinue your Systematic Investment Plan (SIP) and hold on to your investments as long as you want. The AMC will not charge you any "additional" fee for this.
Having said that stopping investment in a poorly-performing scheme and leaving the investment in for some more time may not help you to earn more returns from it.
We typically ask investors to leave a fund if it performs badly vis-a-vis its benchmark and category continuously for a year or more. In such a scenario, we ask investors to stop their investments it and shift their existing investments in it to a better performing fund in the same category.
This article was originally published on February 01, 2016.
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