Switching in Mutual Funds: Meaning

What does switch mean?

In the context of mutual funds, 'switching' refers to the option that allows investors to transfer their investment from one scheme to another within the same fund family. It is a feature that enables investors to realign their portfolio based on changing investment objectives, risk appetite, or market conditions without cashing out. While switching can be a valuable tool for portfolio rebalancing, it may sometimes come with a switching fee, which is a cost levied for availing this facility.

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