Tracking the Performance of Your Mutual Fund is Now Easier than Ever
Posted: Feb 23, 2019
The sole purpose behind every investment decision is to generate profits and enhance your wealth. The term "wealth" in extremely important for your financial future. This is the money that will help you take care of your short-term and long-term funding requirements. To ensure that your investment grows in accordance to your financial goals, you must monitor your investments closely and take any corrective actions as and when required.
The same principle is applied in the case of mutual funds. Keeping a close eye on mutual fund performance is extremely important for you. As mutual fund investments are linked to market risks, there is always the possibility of any event affecting the performance of a mutual fund. If you do not keep an active approach, you are likely to suffer significant losses against your investment. With a proactive approach, you can ensure the growth of your investment with mutual fund dividend. Let’s understand how you can track the performance of your mutual fund with some simple steps.
Why do you need to track your mutual fund performance?
Tracking your fund performance is extremely essential. There are various reasons that warrant you to keep a close track of your mutual fund investment such as: - You can change your portfolio or liquidate your investment if the returns from the fund over the period are not in sync with the mutual fund calculator.
- It will help you compare the performance of your fund with other similar funds and take any corrective decisions if necessary.
- You can ascertain if the mutual fund dividend that you are getting fulfils your requirements.
- Adjust the returns with help of an inflation calculator and see if they can satisfy your future requirements.
How to track your fund performance?
It is extremely important for you to track your mutual fund performance. You need not do it every other day, but it is essential that you monitor the progress of your mutual fund at least once every month. This process is very easy with help of a fund fact sheet. A fund fact sheet is published by the asset management company every month. It details the various schemes managed by the fund and their respective performance. It includes essential details such as: - Performance of the schemes in terms of CAGR, Standard deviation, and other ratios.- How your money has been invested in respective securities.- Details regarding the size and investment in each of the scheme managed by the fund house.This fund fact sheet can be downloaded from the website of the company; and it offers you a convenient way to track your mutual fund performance.
Changes you need to track closely
Apart from the performance of the mutual fund, there are certain changes that you must keep an eye on, because they might not have a direct implication on your mutual fund dividends or Net Asset Value but is likely to affect the performance of the mutual fund substantially. These changes are: - Change in the fund manager: If the fund manager has been changed, it could have a direct effect on your investment. When you opt for a mutual fund, you also consider the experience and credentials of the fund manager. If the fund manager is changed, you cannot be sure if the new fund manager will be able to meet your expectations.
- Diversion from the mandate: If the fund is investing in securities that are beyond the mandate of the fund, it is a red signal. This indicates some underlying problems with the fund and might require you to have a relook at your strategy.
But comparing the performance of the mutual fund in isolation is not the correct approach. You must compare it with the performance of other similar funds in the market. This will provide you with a comprehensive review of the performance and would make sure that you take a well-informed decision only.
Here's a little bit about myself. I've done a Masters in Economics and teach the subject to high school students. I am 32 years old and married to an investment advisor. A Dhoni fan who loves to play football! I am a sports enthusiast and a firm beli