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 anal🐲yzing 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 tuꦅned.
How to Monitor and Track
Consolidate Your Investments in One Platform
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 reque🔴sts, start SIPs, and invest in lumpsum through these platforms. Keeping track wꦬill help you analyze your total returns better.
Check Performance Against Benchmarks
You must compare the scheme's performance with both the benchmark and category average. If it beats the be♕nchmark, 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 𒉰to wait at least 2-3 years to evaluate it properly.
Monitor Expense Ratios and Other Costs
Mutual fund companies l⛎evy multiple charges. The charges are ཧminimal 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.
Revisit Asset Allocation Periodically
You must analyse your portfolio every quarter or once in every six month, as per your preference and investment objectives. This allows you to undꦯerstand how your investments are performing and you can rebalance it if required.
Track SIPs and Investment Growth
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 𒁏in SIP investments because it calculates the average return of each SIP investment.
Read Fund Manager Reports
You must read the fund manager's quarterly or annual reports. This will give y⭕ou 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 f🐻und you invest in.
Stay Informed About Market Trends
The market is interconnected with the global markets, espe🐼cially with the United States. It also gets affected by domestic macroeconomic situations like interest rates, economic policies, and geopolitical conflicts. You can leaꦐrn 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 und🎶erstand why your funds may perform a certain way and prepare for potential market shifts.
Seek Professional Help When Necessary
However, it has become easy to invest by downloading a t🌌hat deals with mutual fund investments. However, if you are not an expert in this field, you should al💜ways consult a financial advisor. In the long run, expert advice will help you easily meet your investment goals.
Conclusion
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, a☂nd 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 wওhere you can explore various mutual funds, get information about them such as about th൩e fund managers, expense ratio, past performance etc.
