Track mutual fund portfolio

Like your car, even your mutual fund portfolio requires regular maintenance in the form of monitoring. Investing through a mutual fund scheme is only a part of the job. To ensure you derive the full benefits of your investments, it is vital to track your mutual fund portfolio performance over time and make changes when needed. You should not just make the mutual fund investments and then forget about them, assuming you will get returns at the time of maturity. If you fail to monitor and rebalance your mutual fund portfolio from time to time, you might not be able to tap the full potential of your scheme. Hence, it is always advisable to track your mutual fund portfolio and makes changes accordingly. 

Here is everything you should know about tracking a mutual fund portfolio: 

How can you track your mutual fund portfolio? 

You can use the fund fact sheet to assess your mutual fund portfolio. Fund fact sheets are typically three-page documents that give you an overview of the mutual fund performance. Fund fact sheets are easy to read and understand, even for novice investors. Generally, the fact sheet will give you information regarding the following elements: 

  • Performance: The fact sheet will show the performance of the mutual fund scheme over the last ten years. That helps youchoose your mutual fund scheme wisely based on the historical returns and current performance trajectory 
  • Risk level: The fund fact sheet also gives you detailed insights regarding the risk level of the mutual fund scheme. The fund fact sheet also details how your money has been deployed in different securities. You can choose a fund that fits your risk tolerance. 
  • Fees: Before you buy a mutual fund, it is crucial to assess the expense ratio of the scheme. The expense ratio includes the cost of managing and handling mutual funds.  

Fund fact sheet of an AMC (Asset Management Company) details all the mutual fund schemes managed by the company. You can also get an individual fund fact sheet for your mutual fund scheme. Generally, the fund fact sheet is available on the company’s website.  

Using NAV to track mutual fund performance 

All mutual funds have a NAV (Net Asset Value) that signifies the per-share market value of the mutual fund. NAV denotes the performance of the mutual fund. You can calculate the NAV of your mutual fund scheme by dividing the market value of your portfolio by the number of mutual fund units on any particular date. The market value of the securities in a mutual fund portfolio changes every day. Hence, the NAV of your scheme varies each day and is declared at the end of a trading day.  

You can compare the performance of your mutual fund scheme with the index benchmark to get a holistic view of the fund performance. Further, you should also assess your fund returns with other similar mutual fund schemes.  

Apart from using the fund fact sheet and the NAV, you can also use advanced platforms like Alphaniti to judge the performance of your scheme. You can track how your mutual fund portfolio is performing versus its peers on a monthly or a semi-annual basis.  

Few factors to keep in mind when tracking mutual fund portfolio 

 Besides focusing on the returns, it is beneficial to conduct a comprehensive evaluation of your mutual fund scheme by tracking some vital changes that can influence portfolio performance. 

Here are some points to analyze in a mutual fund portfolio: 

  • Frequent management changes: Keep an eye out for any frequent or sudden management changes in your mutual fund scheme. If your fund manager is changed frequently, it can be a red flag because a change in fund manager can cause modifications in the investment style and philosophy of the scheme. For instance, your mutual fund portfolio comprises 60% equity assets and 40% debt securities. However, your fund manager is changed, and upon monitoring your fund after six months, you find your portfolio invests only 50% in equity and the remainder in debt.  
  • High churn: If your mutual fund portfolio generates a high turnover regularly, you should be wary of its performance.A high turnover can cause high transaction costs and erode your returns. Further, a high churn can indicate a short-term portfolio focus, which is not ideal for a long-term investor. 

Overall, as a prudent investor, it is wise to consistently monitor and rebalance your mutual fund portfolio to ensure it aligns with your financial goals, risks, and investment horizon. However, you should give a new fund at least the first six months before you start tracking its performance. Moreover, do not engage in emotional bias and make decisions based on short-term market outlook. Every mutual fund scheme takes its time to deliver returns. Hence, avoid panic and emotion-based choices and keep your eye on the long-term goal.  

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