In this guide, we have explained how you should track your portfolio of mutual funds efficiently.
Before investing in a mutual fund, you must do your due diligence about fund performance, your risk appetite, the goal for which you are planning to invest, Option, expense ratio, etc. Then, you start investing after analyzing every factor of the investment process. However, once you start your investment, you must monitor and track your mutual fund investment. This will better help you manage your mutual fund portfolio.
There are multiple ways to monitor and track your mutual fund investment once you have started investing after you . In this guide, we have explained how you should track your portfolio of mutual funds efficiently. Stay tuned.
It's pretty difficult to track multiple mutual funds in different apps. However, mutual fund transfer agencies like CAMS, including KFintech, allow you to view all your investments in one place. You can also place redemption requests, start SIPs, and invest in lumpsum through these platforms. Keeping track will help you analyze your total returns better.
You must compare the scheme's performance with both the benchmark and category average. If it beats the benchmark, then it means it has good performance; however, if it lags against the category average, then it can be a cause of concern. But always keep in mind that fund performance changes now and then, it is ideal to wait at least 2-3 years to evaluate it properly.
Mutual fund companies levy multiple charges. The charges are minimal compared to the return that you generate. However, they impact your return meaningfully in the long run due to compounding. So, you should always check the expense ratio and exit loads (if any). Remember, index and have the lowest expense ratio as they track the performance of an index, while regular funds have a higher expense ratio as they are actively managed.
You must analyse your portfolio every quarter or once in every six month, as per your preference and investment objectives. This allows you to understand how your investments are performing and you can rebalance it if required.
You must also track the performance of your systematic investment plan (SIP), which can be reviewed at least yearly. You must calculate the CAGR and XIRR. Though CAGR is a good measure, XIRR is preferred in SIP investments because it calculates the average return of each SIP investment.
You must read the fund manager's quarterly or annual reports. This will give you an overview of the manager's mindset, fund performance, key holdings, and market outlook. Tracking the fund using this method will keep you focused on the fund you invest in.
The market is interconnected with the global markets, especially with the United States. It also gets affected by domestic macroeconomic situations like interest rates, economic policies, and geopolitical conflicts. You can learn about market conditions using the . It will give an upper hand in decision-making more efficiently. However, in the long run, they do not affect the returns you generate much.
Market conditions, such as interest rate changes or economic policies, affect mutual fund performance. Use financial news platforms or apps to stay updated about the market news. This knowledge helps you understand why your funds may perform a certain way and prepare for potential market shifts.
However, it has become easy to invest by downloading a that deals with mutual fund investments. However, if you are not an expert in this field, you should always consult a financial advisor. In the long run, expert advice will help you easily meet your investment goals.
Investments in mutual funds are subject to market risk. It's not a buy-and-forget formula, especially when a mutual fund company and fund managers manage schemes. They can be underperforming their benchmark, though still delivering returns. However, a fund not performing similarly to the benchmark is not preferred for investment. Besides that, expense ratio, fund volatility, beta, and any change in fund manager should be keenly accessed regularly to ensure your investment is on track. If there is any deviation, you should change the scheme.
HDFC Sky is your all-in-one where you can explore various mutual funds, get information about them such as about the fund managers, expense ratio, past performance etc.