Fund Switching

Fund Switching - The redistribution of investment capital by selling one group of mutual fund shares and then taking the money to purchase other mutual funds. This normally occurs when an individual elects to alter his or her portfolio because of observed changes in the market that inspire a need for switching. The desire is to improve one?s investments with better returns in their growth by switching to shares that appear to have more potential. Since the sales fees for such transactions are generally very high the option of changing investments has to offer far more benefits than what is available from the current shares.