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Shall I redeem my mutual fund investments now to book profit?

Dhirendra Kumar talks about the drivers to exit a fund

I had made some investment in two mutual funds - Kotak Flexicap and Mirae Asset Hybrid Equity in 2019. I have earned more than 40 per cent returns on my investment. Should I redeem my investment as these have delivered good returns in the past two years?
- Ratnakar

According to me, both of these are different kinds of funds and these have been performing well for quite some time now. Kotak Flexicap Fund is a very old fund which was launched in 2013 (Direct plan) and it has delivered about 17 per cent returns annually since inception. Mirae Asset Hybrid Equity has also delivered over 14.5 per cent returns annually since inception. So these are good funds to stay invested.

The primary drivers to enter or exit a mutual fund should be whether or not you need that money in the near future or if the fund is not performing well as compared to its peers. If you had invested this money for a goal which has now arrived, then you should exit the fund. Else, if you don't need this money for a long time, continue to stay invested.

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