How to Review Your Mutual Fund Portfolio

Once a year for a full review is enough for a long-term portfolio. Pick a fixed month, such as April when the financial year starts, so it becomes a habit.

Put the date in your phone calendar with a yearly repeat.

Checking daily or weekly tells you about market noise, not about your plan. It also makes it much more likely that you will stop a SIP or sell at the wrong moment, which our page on your SIP when the market falls explains.

The only reasons to look sooner are a big life change, such as a new job, marriage, a child, or a goal date coming close.

Download a consolidated account statement. It shows every folio you hold across all fund houses against your PAN, free of cost. Our page on the consolidated account statement explains how to get it.

This step alone often surprises people. Old folios, forgotten SIPs and small holdings from years ago all show up. If something you expected is missing, our page on finding unclaimed investments can help.

Before looking at any return, list what the money is for and when you need it. Retirement, a child college, a house, the emergency buffer.

Then ask: is each pot in the right kind of fund for its date? Money needed within two or three years should be moving out of equity into steadier funds. Long-term money can stay in equity. Our page on asset allocation explains this rule.

This is the most important check in the whole review, and most people skip it.

After a strong year for shares, your portfolio may have become more equity-heavy than you planned. After a bad year, the opposite.

If the mix has drifted far from what you intended, bring it back. You can often do this by directing new SIPs to the lighter side rather than selling. Our page on portfolio rebalancing covers how.

Compare each fund with its own benchmark, over three to five years, not with last year top performer. A fund that lags its benchmark for one year is normal. A fund that lags it clearly, year after year, deserves attention.

Also compare it with other funds in the same category over the same period. Our pages on the benchmark and the fact sheet show where to find these numbers.

For your own SIPs, look at XIRR rather than the scheme headline return, as our page on XIRR explains.

If you hold several funds in the same category, look at their top holdings. You may own the same companies three times over.

Clutter is one of the most common problems we find in reviews. Our pages on portfolio overlap and how many funds to hold explain how to simplify without an expensive clean-up.

This takes ten minutes and prevents most future headaches.

• Is a nominee recorded on every folio? Our page on nomination covers this.
• Are your bank account, email and mobile number current?
• Is the SIP mandate limit high enough for next year increase?
• Does your spouse or a family member know what exists?

If your income went up this year, raise your SIPs by at least part of the increase. This single habit often matters more than any fund change.

Our page on the step-up SIP shows how to set this up so it happens automatically each year.

Consistent underperformance against its benchmark and category over several years.

A change in the fund itself: a new fund manager with a different style, a changed objective, or a merger.

A change in your needs: the goal is near, so the money should move to a steadier fund.

Our page on when to sell a mutual fund goes into each of these.

One bad year. A friend fund did better. A news headline. A new fund launch. The market fell.

Switching for these reasons usually means selling after a weak patch and buying after someone else strong patch. That tends to hurt rather than help. And every switch can have exit load and tax effects, as our page on switching mutual funds explains.

You do not need expensive software, daily tracking, or a new fund every year. You do not need to predict the market.

A good review is mostly about checking that the plan still fits your life: the goals, the dates, the mix, and the paperwork. Changing funds is the smallest part of it, and often the right answer is to change nothing at all.

If a review ends with "everything is fine, raise the SIP a little", that is a good review, not a wasted hour.

End each review with a short note: what you checked, what you changed, and why. Next year, read it first.

This stops you from repeating the same worries every year, and it helps a family member understand the plan if they ever need to. If you want a second pair of eyes on your review, get in touch. We are distributors rather than investment advisers and we recommend no schemes.