WHAT SHOULD YOU DO WHEN YOUR FUND MANAGER CHANGES?

• When a fund manager changes (for whatever reasons), it is very natural to be concerned, but there is no need to act rashly and sell or even terminate your Systematic Investment Plans. 
• Instead, you should ‘wait and watch’ before making your next move.
• If it is a fund that very closely tracks the benchmark or has a very specific investment universe, then there should not be any cause for alarm. 
• Even the impact on a dividend yield fund would not be much. 
• If the fund is a multi-cap fund or a mid- and small-cap one, then the role of bottom-up stock picking and making the right calls is extremely important, and a fund manager’s move in this case would be critical because it is his personal judgment that goes into adding alpha.
• If it is a hybrid fund and the fund manager of the lesser allocated asset class leaves, then it should not bother you. 
• Also, in the case of fixed income there is not much of risk by way of credit and the fund’s mandate generally states the maturity risk that is to be taken. 
• If you held the star performer and the fund manager has moved on, then it’s cause for alarm, as the fund manager’s knowledge and expertise does make a difference, even if the fund house is process-driven.
• Check the new fund manager’s track record by looking at the performance of schemes run by the past fund manager and then compare the performance of schemes managed by the new fund manager to check if he has done a great job elsewhere, if not better. 
• Also, consider the possibility that a new fund manager may actually work out better, but keep a very close watch on the fund.
• If the old fund manager did stick to his mandate, then you should keep a watchful eye to see if the new one is following suit, by keeping a close track of the transition. 
• Finally, watch his moves, see how they perform and, most importantly, if they still are a good fit with your portfolio.