The first thing you look for as an investor when it comes to investing in mutual funds is the performance. That said, call it ironic or reality, more often, the mistakes made by investors with regards to mutual fund investments tend to track back to the investors’ incorrect assessment of the mutual fund portfolio’s current performance.

Now, is there a way for the investors to do the correct things? In this regard, this article will shed some light on some of the best ways to monitor your mutual fund’s performance as an investor.

Here are 6 easy ways in which you can monitor your mutual fund portfolio’s performance:

Have a clear performance monitoring system

Monitoring the performance of your mutual fund investments at regular time intervals becomes easier when you have a performance monitoring system in place. It is crucial to track the performance of your MF portfolio’s Net Asset Value (NAV) at least once every quarter or semi-annually. However, if such frequent and regular tracking becomes difficult, then you must track your fund’s performance at least once every 18-24 months.

Watch out for any changes in your MF portfolio

This is all the more applicable for equity funds. You need to draw comparisons of your MF’s performance with that of the Sensex. You can also draw comparisons with similar schemes of other mutual funds. This will give you a good base to analyse changes.


Check whether your fund is fulfilling its objectives stated in the offer document

This is a vital step in measuring how effectively your fund is performing. If the fund’s delivering the promised objectives, you are fine, else you might have to contemplate an exit for moving towards another mutual fund. The key for you as a mutual fund investor is to ensure that you don’t get emotional about your MF choice and simply focus on how well it’s meeting the objectives promised in the offer document.

Look out for newsletters, annual reports, and other published information of your MF

Documents such as newsletters and annual reports help you largely in terms of keeping track of your MF’s progress. These documents make your privy to valuable financial information pertaining to your MF’s performance against market expectations and promised objectives. They serve as a good future reference tool.

When you don’t understand something, call the investor service centre of your mutual fund and bombard them with your questions. Do everything possible to analyse your fund’s performance effectively. Look out for the investor education initiatives of your MF, in case it provides that. That will give you a better perspective of your investment.

Dig deep to find out reasons for your MF’s underperformance, if applicable

In case your MF has underperformed based on your analysis, don’t just brush it under the carpet as another market driven trigger. In fact, if your MF scheme has performed badly for two quarters back-to-back, that’s the first indication for you to go deeper into the reasons. Don’t just wait for it to improve since it could be too late by that time.

The major fact that you will need to establish is whether your MF has been under performing owing to a slight slump in the stock markets or are the reasons more specific to your MF scheme. It’s crucial that you do not get perturbed if your MF scheme is under performing in a runway market. However, if it under performs in a falling market scenario where the NAV drop is higher than the drop in the benchmark index, it could be the first indication that it is time to conduct a review of your investment.

Don’t ignore your fund manager’s comments

Your MF fund managers provide you with expert comments and recommendations in newsletters, annual reports, and other public investor documents. Do not make the mistake of ignoring their comments and attempt to understand what they are trying to say. In fact, it is ideal to continue with your MF investment only if you are satisfied with your fund manager’s explanations in the newsletters and annual reports.

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Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.