3 Advantages of Switching in Mutual Funds

[Suba]

Switching is an activity carried out by a mutual fund investor to exchange the mutual fund units they own with other mutual fund units, for example investors exchange fixed income mutual fund units for stock mutual fund units, but the switching process can only be carried out if the investment units in the mutual fund are managed. by an investment manager from the same Custodian bank. So the switching process will also allow investors to get the net asset value price on the same day. The switching process must also be carried out carefully and based on careful calculations and analysis. Meanwhile, some of the advantages of switching are as follows:

1. Secure profits
If profits from high risk or low risk mutual funds have reached the target, investors need to switch to low risk mutual fund products to realize profits.

2. Minimize risks
Switching will also be useful for minimizing the risk of loss, especially when there is a disease outbreak or economic crisis, many companies close/go bankrupt, so investors need to immediately switch from stock mutual fund products to fixed income mutual funds.

3. Manage the allocation of mutual fund products
Asset allocation or investment in mutual fund products can be adjusted according to the plan, so that the investment portfolio is in line with your wishes or targets. or there is a change in the investment unit so that switching is necessary.

 

[Ganibade]

Transferring funds between mutual funds with different strategies, switching to a different share class, or reallocating a portfolio to a different mandate are examples of switching, which is the process of shifting money between investments. The mutual fund's investment units must be managed by an investment manager from the same Custodian bank in order for the switching process to be completed. Making a switch can help you reduce risks, secure earnings, and alter your investing approach. But switching needs to be done with caution and be supported by thorough calculations and research. There may be switching expenses, depending on the process selected. Investors are considered to have sold units of one fund and bought units of another when transferring between mutual fund trusts in a non-registered account, which

 

[Ganibade]

Transferring funds between mutual funds with different strategies, switching to a different share class, or reallocating a portfolio to a different mandate are examples of switching, which is the process of shifting money between investments. The mutual fund's investment units must be managed by an investment manager from the same Custodian bank in order for the switching process to be completed. Making a switch can help you reduce risks, secure earnings, and alter your investing approach. But switching needs to be done with caution and be supported by thorough calculations and research. There may be switching expenses, depending on the process selected. Investors are considered to have sold units of one fund and bought units of another when transferring between mutual fund trusts in a non-registered account.