Look Before You Sell

Investing in mutual funds is a great way to diversify your portfolio and grow wealth over time. However, it does not mean that every fund that you invest will perform as per your expectation. There can be a few funds that may be lagging in their performance. Even currently when most of the funds are generating returns in double digits, there are a few funds that are generating negative returns. Hence, it's important to remember that no fund is guaranteed to perform well in the short or long term. 

If you're invested in a fund that is underperforming, it's important to ask yourself if it's time to sell. Again, this underperformance should be looked at from a different perspective. For example, currently, you will find that entire REITs and China-dedicated funds are generating negative returns in the last one-year period. So, if you have invested in any of these funds, chances are high that they might be in red. This does not mean these funds warrant an outdoor from your portfolio. If they serve the larger purpose of portfolio diversification you need to remain invested in the fund. Regardless, there is a fund under Flexi-Cap that is generating returns in single digits despite the category generating returns in double digits. In this case, you need a closer look at the fund. 

Selling a poorly performing fund isn't an easy choice, but an informed one. Deciding whether to part ways with an underperforming mutual fund involves a blend of objective analysis and personal considerations. Our cover story empowers you to take a thoughtful approach, guiding you through the maze of factors and insights. By doing so, you can confidently make a decision that aligns with your financial aspirations and puts you on a path towards a resilient, diversified, and prosperous investment portfolio.

Shashikant Singh
Executive Editor