Why do you suggest graded exit on Neutral fund?

Modified on Thu, 29 Jun 2023 at 06:10 PM

Neutral funds score varies between 35 to 72. 

We believe trimming the portfolio on the neutral fund is a better approach than just holding on to them without acting on it. 

The Same treatment cannot be given to a fund of score 36 viz-a-viz fund with a score of 70. 

Hence, we suggest trimming ( withdrawing in a graded manner ) with a varied percentage based on the score. 

Lesser the score, the higher the trimming, and the higher the score lesser the trim. 

This will ensure that tomorrow if the neutral fund with a score of 70 goes above 72, we would not have asked you to exit much. 

Also, if a fund had a score of 36 changed in a few months to a score of 32, then we would have trimmed the investment in this fund to a larger extent already and you wouldn't have had left with many units in this fund. 

We also have considered your tax impact and considered graded exit versus full exit at once. 

The Graded exit of neutral funds over a period of time, might help reduce the exit load/ tax impact as well.

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