Mutual funds are one of the popular investment option today. It’s good that investors prefer to invest in mutual funds due to high returns and many advantages it offers over traditional investment options.

Its always recommended to choose mutual fund scheme(s) suitable to your goal, duration, age, risk capacity and few other financial requirements. Choosing right scheme is not enough, its equally important to monitor your mutual fund scheme(s) and making changes by exiting or switching from any fund to keep your portfolio align to your goals.

But one should not redeem from a mutual fund just for the sake of profit or because its not delivering the returns you are expecting. There should be a valid reason to exit or redeem from a mutual fund. Let’s understand and know the reasons to exit from a mutual fund:

1. -When a fund consistently underperforming even in bull market.
2. -If there is any change in fund manager /style/ objectives and therefore it no longer serves your goal or portfolio.
3. -When you want to rebalance your portfolio due to change in your income, age, risk or due to change in market conditions.
4. -If any specific fund does not giving required diversification to your portfolio.
5. -If there are too many same type of funds in portfolio.

Sometime, your base of choosing a mutual fund scheme can lead you to sell it off. For example, When you invest in any particular mutual fund scheme only on the basis of its past returns and if it’s not performing well as per your expectations, you would end up by exiting from that fund. A mutual fund scheme can show negative returns in falling market but this will be for short term and in the long run it can surely give positive returns.

Mutual fund investments are meant for long term as it helps to accumulate wealth and suitable for goals like retirement, kids future etc. Be wise and take informed decision.

Happy Investing!