Investing in mutual funds can be an excellent way to save for the future, but not every fund you pick will be a winner. Reviewing the performance of your funds on a regular basis and getting rid of your losers will free up cash for better funds and help you earn a higher rate of return in the future. The procedure for trading in your mutual funds and buying new ones varies, depending on whether those funds are in the same fund company or a different one.
Same Fund Company
Contact the mutual fund company using the toll-free phone number listed on your statement. If you have established online access for your account you can exchange funds online as well.
Tell the representative you want to sell your mutual fund and use the proceeds to buy a different fund. Verify the ticker symbol of the fund you want to sell, and give the representative the ticker symbol of the fund you want to buy. If trading online, go to the trading or orders menu and enter the funds you want to buy and sell.
Verify that you want to make the trade. Keep a copy of the trade confirmation with your tax records. You will need to have this documentation available when you do your taxes.
Different Fund Companies
If you hold your mutual funds through a brokerage account, you can trade between different fund companies by instructing your broker to sell one fund and buy another. If you bought the fund directly from the mutual fund company, call them regarding the fund you wish to sell. You can also log on to your account online.
Go to the trading menu if accessing your account online, or give the telephone representative the ticker symbol of the fund you want to sell. Verify your mailing address so that the company can cash out the fund and send you a check.
Deposit the check for the proceeds of the sale in your checking account, then write a check to the mutual fund company whose fund you want to purchase. Complete the application for the new fund and send it, along with your check, to the address listed on the form.
Keep copies of all your paperwork, including the sale proceeds for the old mutual fund and the purchase confirmation for the new one, with your tax records. You will need this documentation when you do your taxes.
Items you will need
- Mutual fund application