Help! My fund's manager quit. Should I jump ship as well?

UTI Mutual Fund. Fidelity Mutual Fund. ICICI Prudential Mutual Fund. Taurus Mutual Fund. IDBI Mutual Fund. Tata Mutual Fund. Principal Mutual Fund. All of them have one thing in common- they’ve seen the exit of the fund manager or a reshuffle of their top personnel.

When key fund managers quit a fund house, the top question on investors’ minds is, will the new manager be able to carry on the same quality of work?

When key fund managers quit a fund house, the top question on investors’ minds is, will the new manager be able to carry on the same quality of work?

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“When a highly regarded and influential person at the helm of a company’s affair leaves, it no doubt creates a flutter among its stake holders,” notes a story in the Wealth supplement of The Economic Times.

The story urges investors to keep two things in mind when a high-profile exit happens:

Do not jump ship: Don’t panic. When a top fund manager leaves, it’s natural for investors to feel some panic. But panic in itself is not a good reason to exit the fund. One must remember that mutual funds are run by teams, not an individual. So when an executive quits, there is usually someone who can fill those shoes and ensure that the fund’s performance does not get affected. Having said that, be warned that some funds are indeed, one-man shows.

Monitor the fund closely: If you are invested in a mutual fund, wait and watch for a while. Keep an eye out for any changes in investment strategy, or whether it is increasing buying or selling stocks from a particular sector. If you are not very comfortable with the new manager’s decision, you can decide to exit the fund.