Here's how you can track the performance of your mutual fund schemes

Mutual funds stand out as versatile instruments in the world of financial investments, pooling resources from various investors to create a diversified portfolio of stocks, bonds, or other securities. For investors, the significance of actively monitoring your mutual fund portfolio cannot be overstated. This guide aims to shed light on the importance of tracking your mutual fund performance and provides effective strategies to ensure your investments align with your financial goals.

• Table of contents

1. Why should one track mutual fund performance?
2. Effective ways to track your mutual fund investment performance
3. Various ways to check mutual fund status
4. FAQ

Why should one track mutual fund performance?

Investors embark on the journey of mutual fund investments with the objective of wealth generation. However, this journey requires vigilance. Regularly tracking the performance of your mutual fund investments serves several crucial purposes.

• It allows you to assess the overall health of your portfolio, make informed decisions based on real-time data, and potentially optimize returns.
• Actively monitoring your investments enables you to identify underperforming funds promptly, facilitating timely adjustments to your investment strategy.

Effective ways to track your mutual fund investment performance

Let us look at some of the ways on how to track mutual fund performances over time–

• Scheme vs benchmark: An effective method is to compare your mutual fund scheme's performance against a relevant benchmark. This comparative analysis provides valuable insights into how well your fund is performing compared to the broader market. It serves as a benchmark to evaluate the fund's relative success.
• Look at the portfolio: The composition of a mutual fund's portfolio is a key determinant of its performance. A well-diversified portfolio can contribute to relatively stable returns. Regularly scrutinising changes in the fund's portfolio provides insights into the fund manager's strategy and decision-making process.
• Checking ratios: Delving into key financial ratios, such as the expense ratio and alpha, can offer a deeper understanding of your fund's performance. A lower expense ratio indicates cost efficiency, while a positive alpha suggests the fund is generating relatively better returns than expected.

Various ways to check mutual fund status

Here are some ways for how to check mutual fund status:

conclusion

Actively monitoring your mutual fund investments is not merely a task but a strategic approach to wealth management. By implementing the strategies and utilising the tools mentioned in this guide, investors can empower themselves to make informed decisions, align their investments with financial goals, and potentially optimise their wealth generation journey. The dynamic nature of the financial landscape requires investors to stay informed and engaged. Through consistent monitoring and strategic adjustments, investors can navigate the intricacies of mutual fund investments successfully.

FAQs:

How frequently should I track my mutual fund investments?

A: Regular monitoring is advisable; however, avoid making impulsive decisions based on short-term fluctuations. A quarterly review is a reasonable approach for most investors.

What should I do if my fund consistently underperforms?

A: Assess the reasons behind underperformance. Consider consulting a financial advisor before making any decisions to ensure informed choices aligned with your financial goals.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.

• Mutual fund fact sheet: The fact sheet serves as a comprehensive snapshot of the fund's performance. It includes essential details such as returns over different time periods, expense ratios, and key portfolio information. This document is an invaluable resource for a quick overview of your fund's standing.
• Consolidated account statement (CAS): For a holistic view of your mutual fund holdings across different fund houses, the Consolidated Account Statement (CAS) is indispensable. It consolidates all your mutual fund investments, providing a unified and organised overview.
• AMC's mobile app/web portal: Most Asset Management Companies (AMCs) offer user-friendly mobile apps and web portals. These platforms allow investors to track their mutual fund investments conveniently, providing real-time updates on portfolio performance.
• Online portfolio trackers: Leveraging online tools and platforms to aggregate and monitor mutual fund investments from various sources simplifies the tracking process. These tools provide a centralised view of your investments, aiding in comprehensive portfolio management.
• SEBI-registered investment advisor: Seeking advice from a distributor or a SEBI-registered investment advisor adds a personalised touch to your investment strategy. Professional guidance based on your financial goals and risk tolerance can enhance your decision-making process.