I'm told that once I invest in a fund, I should periodically (like annually) monitor the performance of the fund and exit it if it's consistently under-performing its index or the median fund in its category. If not, I don't want to churn my portfolio.

Now, are there any widely accepted criteria on when a fund is under-performing enough that you should exit it? A fund can under-perform in one year, so that's not a good criterion. Two years?

And to what extent is under-performance allowed? Maybe if a fund loses 10% in the first year when the index went up 10%, you'd immediately exit it, rather than giving it another year?

Are there any norms for this?

This is with reference to India, if it matters.

  • 2
    Obligatory Will Rogers quote: "Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it." Nov 18, 2015 at 15:45
  • That's neither useful nor funny :) Sep 12, 2016 at 4:20


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