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The 'Hold' option in Value Research Premium

Funds tagged as 'Hold' do not meet our high expectations in terms of one or more parameters that we evaluate the funds on, says Ashutosh Gupta

What does the 'Hold' option mean in Value Research Premium? Does it mean that I should sell?
- Amit Rathore

Well, these are typically the funds which do not meet our high expectations in terms of one or more dimensions, such as the performance or its consistency, or costs, or the stability of the fund management team, etc. So, these are the kind of parameters that we evaluate the funds on.

But having said that, we also do not have concerns about these funds of the kind that we ask you to sell them immediately. For instance, there may be better performers around that make our 'Buy' list, but these funds may not be outright poor performers themselves. That is why we believe, if you already have investments in them, you can continue to remain invested.

You may take a call on exiting these funds for a few reasons. First is that if they make up for a very small portion of your overall portfolio, so they don't matter a lot and don't make any meaningful contribution to your portfolio anyways. Second, if you are running a large portfolio in terms of the number of funds and you're looking to cut down on a few funds, then certainly the ones tagged as 'Hold' should come up first for pruning down the number of funds before you start looking at the 'Buy' funds. So, these are the kind of reasons for which you should consider exiting a fund tagged as 'Hold'.

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