InvestorQ : When should I transfer my mutual fund investment into another scheme?
Ayushi Kampani made post

When should I transfer my mutual fund investment into another scheme?

Answer
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krithika Saxena answered.
1 month ago


Mutual funds (MFs) always work better in the long term. Judging the performance of an MF after just a short period of time year is not the right way to go about it. The better way to do this is to compare the performance of your mutual fund with the performance of other mutual funds within the same category.

If the other mutual funds have given better returns in the same period, it would be advisable to switch to another better fund. I would also advise you to invest in mutual funds via the SIP route. SIPs are a very good way to take advantage of the volatility associated with mutual funds, especially equity-linked ones. When you invest in a disciplined manner via SIP, you tend to get more units when the market is low and fewer units when the market is high, thus averaging the cost of mutual fund units.

The only times you should think of switching your SIPs are in the following scenario:
a. The mutual fund you are investing in consistently underperforms the benchmark index.
b. Change in the investment objective of the fund.
c. Change in fund manager -if the new fund manager’s investment strategies are not aligned with those of the said mutual fund.