Wealthfund Mutual Funds Mantra: What you should do when your funds are not performing?

wealthfund-mutual-fundsWhen it comes to mutual funds, there are many benefits, some of them are – management of your money through professional fund managers, diversification, minimum investment thresholds, accessibility liquidity and a regulated market. Even with all of these advantages, there are chances of your fund under-performing. As the motive of investing in such funds is to achieve your corpus, thus monitoring the performance your portfolio of mutual funds is a must.

Here are few to do and keep in notice when your funds under-perform:

  1. You must review your portfolio to keep a track of the performance of your funds. The fund should be able to beat its benchmark. Take notice if there has been a consistent and significant downfall in the performance for your fund.
  2. Sell the under-performing funds and take a position in other funds, which suit your asset allocation. While selling the non performing funds, you should keep in mind the taxes and other transaction costs, which are applicable.
  3. Evaluate the acquisition of the fund houses and changes in expense ratio.
  4. While evaluating the performance of their funds, also consider the return perspective.wealthfund-mutual-funds
  5. If your fund is under-performing due to market downfall, you should hold on to it. This in turn could enhance the performance of your fund during market turnarounds.
  6. Keep in mind that the short term performance of your funds should not be of utmost importance when you have a long investment horizon.

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