6 questions to ask before selling your mutual fund

#1 Does a change in fund manager warrant a sale?

While fund houses downplay the effect of a change in fund manager, in reality, it can impact fund performance. It can be positive or negative.

#2 Can you manage your mutual fund investments by yourself?

Start transferring the money from your equity fund/s into a liquid fund. Use SWP to do this. Start the process 2-3 years before reaching your goal to avoid market risks.

#3 Is your goal fast approaching?

The ideal time to sell your mutual fund investment is when you are close to fulfilling your financial goals.

#4 Has the fund’s ratings dropped?

If a fund’s ratings decline rapidly, sell it. However, if the fund has a strong performance history, wait for a year or two before selling it.

#5 Does a change in fund strategy align with your risk profile?

If a fund changes its investing style, ensure it matches your risk profile and goals. Else, look for alternatives.

#6 Has the fund underperformed its benchmark?.

Often, investors hold on to underperforming funds, hoping they will bounce back. However, this is more of an exception than the norm.

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