How To Track The Progress Of Your Mutual Fund Investments

To make the most out of mutual fund investments, you need to monitor their performance regularly and do it in the right way, using the right benchmarks and peers for comparison. Here's how to go about it.

Hello and welcome to FundooMoney, your 24X7 buddy for all your money matters. Return is the vital aspect of any investment including investments in mutual funds. So, keeping track of the performance of your mutual fund on regular basis is important as selecting a well-performing fund. Here, we will provide tips on how you can stay fully abreast of the performance of your mutual fund investments. That’s coming up in a little while.

Track investments regularly
Here, the word regular doesn’t mean a daily check but a check on a quarterly or half yearly basis. However, how you track the performance of the fund is vital.

Choose the right benchmark index
Don’t let the growth in the net asset value (NAV) of your fund over a period of time, distract you. The right way to compare mutual fund performance is to do it vis-à-vis respective benchmark. This gives you the clear picture of the performance of your scheme. Remember, your purpose of investing in a mutual fund is to get a better return than the market.

Compare with peers
Compare the performance of your mutual fund investments with that of peer funds. Otherwise, you might be guilty of comparing apples with oranges. For instance, if you have invested in a large-cap oriented mutual fund scheme, compare its performance with large-cap oriented schemes rather than mid-cap oriented ones.

Be careful about lump sum and SIP returns
When you opt for a systematic investment plan (SIP), you do not invest the whole amount at one go, but over a period of time. In contrast, in a lump sum investment, you invest the whole amount at one go. This results in difference in returns of the two. Therefore, stay away from comparing SIP and lump sum returns.

We hope you found this useful. Do share your tips on how to track mutual fund investments in the comments section. For more such actionable personal finance information and regular uploads, subscribe to our channel. Also, visit our website, download our mobile app and stay connected with us on Instagram, Pinterest and Slideshare.