If Your Mutual Fund Is Under Performing Here's What You Should Do

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These days we can compare and check mutual fund recent dividends, net asset value and performance through a host of portals that offer comparisons and NAVs on a daily basis.

Goodreturns.in, itself offers top mutual fund gainers and losers on a daily basis.

If Your Mutual Fund Is Under Performing Here's What You Should Do
It is extremely painful to see, just as an example, your fund generating a return of 3 per cent in two years, while other schemes have done 15 and 20 per cent. You wait and wait patiently, until the fund gives a reasonable performance. However, that does not fructify. It is then time to look at options.

Take a look at your schemes portfolio

If you are not up to the mark on understanding stocks in the portfolio, just seek expert advise. For example, if you are seeing a lot of pharma stocks and know the industry is grappling with US FDA worries your fund may under perform, if your fund is heavily skewed in favour of pharma stocks.

If you believe that this fund has remained passive and there has been no change initiated in the portfolio, you might want to change the portfolio.

Seek expert advise

In case the fund is not working, you might want to seek expert advise. For example, just take a look at the quarterly numbers that are unfolding. If you believe IT stocks have reported solid numbers, which they have, it may lead to your fund doing well, if it is skewed in favour of IT stocks.

However, this will only happen, when you have the knowledge. If you do not, please seek expert advise.

Switch your scheme from equity to debt

If you are tired of poor performance, just switch from a equity dedicated scheme, to a debt oriented scheme. This is especially, if you lack the patience as well.

At least you can be assured of returns, ranging from 6-10 per cent, if not more. Of course, you would be very lucky, if you got returns in excess of 8 per cent from debt dedicated schemes.

Just switch to another fund that is performing

Talk to your broker and just move to another scheme. There is no point in waiting, if the fund is passive and there has been poor performance in the last several quarters.

GoodReturns.in

Read more about: mutual funds
Story first published: Thursday, April 21, 2016, 9:32 [IST]
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