Track Your Portfolio Regularly | Value Research An investor cannot afford to invest in funds & then forget about them, their performance needs to be tracked regularly
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Track Your Portfolio Regularly

An investor cannot afford to invest in funds & then forget about them, their performance needs to be tracked regularly

I have SIP investments in the following funds since Aug 2007; should I stop investing in some of these funds as the performance of these funds are deteriorating day by day
- Abhijit Kale

One cannot afford to and forget with mutual fund investments. While you selected good funds across different categories to get the necessary diversity in your portfolio in 2007, you made the mistake of not tracking the performance of your funds regularly.

The need to review one's investment depends on internal and external factors. Internally; your financial goal or need may change or your risk appetite will change. Likewise, performance of a fund may go down, which can be relative to its peers or in absolute terms. These changes also impact the performance of funds that one should be aware of.

The Value Research rating reflects a fund's risk adjusted return over the long-run. One can use the rating as a guiding factor for any investment decision and alter investments based on the changes in the star rating. The star rating system can be used as the first filter to invest as well as an indicator on when to exit a fund. If a fund is repeatedly performing badly, compared to its peers and benchmark; it will start to lose stars in the ratings. This is a good sign to consider exiting the fund. However, just because a fund has gone from 5-star to 4-star it is not a serious cause of worry, but if it continues to lose stars, it is time you exited the fund. Your best option is to exit.

You can consider staying invested in HDFC Equity and HDFC Top 200 and consider exiting the other funds. By staying invested in non-performers you are losing the opportunity to gain from better performing funds, an opportunity loss that can add up significantly in the long run.

Fund Scheme  Category  Rating  3-year return (%)  5-year return (%)
Magnum Contra Multi Cap *** 5.90 10.84
Magnum Global Mid & Small Cap *** 5.89 7.76
Reliance Vision Large & Mid Cap *** 7.83 10.69
Reliance Growth Mid & Small Cap *** 10.81 14.15
HDFC Equity Multi Cap ***** 18.78 16.38
HDFC Top 200 Large & Mid Cap ***** 16.72 16.44
Returns as on March 21, 2011



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