A Guide To Review Your Mutual Fund Portfolio

It’s essential to review your mutual fund portfolio once in a while to analyse the performance of your funds. However, just like other things, there’s a way of reviewing mutual fund portfolio tracker, and this article will guide you about the entire process.

Thanks to digitalisation, you don’t have to hunt old files. You can quickly get a consolidated account statement (CAS) from the registrar of mutual funds or transfer agencies that lists all your mutual fund holdings. CAS records all the transactions for the month and mutual fund holdings as on the date of the statement.If you haven’t received CAS, you can easily download it by entering your email address, PAN and password on the website of the registrar or transfer agencies.

Now that you have the list of the transactions and schemes, you can start comparing. However, note that it shouldn’t be done in isolation, but against the respective benchmark indices. When you do so, you can understand how the scheme has performed.Next, you need to compare how your mutual fund scheme has fared vis-à-vis its category. If the returns are higher than the average, then your scheme has performed well and vice-versa.

In case your scheme has underperformed its benchmark index or category average in the short-term, it shouldn’t bother you. However, if it has been performing below the benchmark index and category for a long time, you must find out the real reason for underperformance.Reading interviews of the fund manager of the scheme can help you get a better idea. Also, in the case of equity funds, markets depend on many factors, most of which are not under your control, and short-term underperformance shouldn’t deter you. Patience is vital in such a scenario.

If your scheme has underperformed for a considerable time, and you are not satisfied with the logic given by the fund manager, then you can contemplate exiting it. Having said that, you should not make any rash decisions and go by the performance in the short-term.For instance, markets across the globe have taken a beating due to Covid-19, wiping out a chunk of investors' wealth. This may prompt many investors to exit. However, keeping mutual fund SIPs running during downturns such as these fetches you more units at a lower price. Also, Indian financial markets have bounced back from downturns in the past.At the same time, returns shouldn’t be the only factor to consider while exiting. If you have invested in a fund with sound fundamentals, there are high chances of getting the desired results in the long term.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.