I have created online SIP investment for a mutual fund for 12 months. I have completed only 4 months. At this point is it possible to cancel the SIP and switch to some other better performing fund? Do I lose any money because of this ?
2006-11-21 07:23:45 · 5 answers · asked by supriyo_mukh 1 in Business & Finance ➔ Investing
It depends.
It sounds like you started a "systematic investment program" with a mutual fund investment company in which every month a set amount is pulled from your checking account to be invested into a mutual fund. And so far, you have made 4 months of investments.
Check the prospectus.
Mutual funds usually require that you maintain a minimum investment within a specific fund (say $2000); if you do not have that minimum investment, the fund has the option of selling out the position and returning your money. If the sales price is less than what you paid for it, then you will have lost money.
What causes confusion is the comment, can you "switch to some other better performing fund". This raises two issues:
If you are thinking about buying another fund within the same mutual fund group, they may not sell out your existing investment. You are keeping your money with that investment company; you are just buying a different fund.
But if you are thinking about buying a different mutual fund with another investment company, then I would discourage you (unless the original investment company is really bad).
What I am really afraid of is that you are "chasing (past) returns". Remember: Mutual Fund investing is for the long term -- not just for 4 months.
2006-11-21 07:36:09 · answer #1 · answered by seaportma 5 · 0⤊ 0⤋
SIP is way of value averaging. Do not get swayed away by past performance instead look at the possibilities of future growth. If you have attained minimum investment limit there should not be any bar in withdrawing from futher investments.
2006-11-21 22:21:50 · answer #2 · answered by cvrk3 4 · 0⤊ 0⤋
Normally you have to continue a monthly SIP for minimum 6 months and quarterly SIP for 2 quarters before cancelling it. otherwise any discount in entry load given under SIP will be charged.
after minimum instalments cancllation is permitted.
2006-11-22 11:57:16 · answer #3 · answered by NirmalJain 2 · 0⤊ 0⤋
More than likely you can move the SIP to another fund within the family of funds without penalty.
2006-11-21 18:43:02 · answer #4 · answered by 12 November 3 · 0⤊ 0⤋
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2006-11-22 12:14:14 · answer #5 · answered by dinu_pawar 5 · 0⤊ 0⤋