How to keep track of mutual fund investment

Although mutual funds (MFs) form a huge chunk of our investment corpus, most of us hardly ever dabble in them or keep track of them as religiously as we would of direct equities

We treat mutual funds almost as a fixed investment instrument and, therefore, miss out on booking profits or getting out of the fund when the losses are still small.

This may be because:

1. Most of us feel that mutual funds are a relatively safer investment than tocks and, hence, we would not lose as much as we would with direct stocks and still maintain a good equity exposure.

2. Keeping track of mutual fund NAV is not as easy as tracking stock rates, which are constantly flashing on TV, newspapers and readily available with brokers. Mutual fund tracking needs some effort.

3. Individuals often invest in mutual funds since they are regarded as a tax-saving instrument instead of an investment instrument and, hence, it has a compulsory lock-in before which we cannot sell. And even after the lock-in period is over, we completely forget about it.

4. Many of us have ongoing SIPs in mutual funds and, hence, we feel that whatever be the markets, in the long run we will definitely make money due to rupee cost averaging.

5. Most of us do not bother to find out the exact portfolio or weightages of the various stocks in a mutual fund scheme and, therefore, are not able to take decisions.

 

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