How would I compare my mutual fund schemes with other funds during the annual review of my portfolio? Also, can you suggest some good practices for the same and more importantly, the things that one should avoid?
The simple rule should be not to look at only the good things happening around us, as there is a common tendency that your fund is not doing well but you are comparing it with the one that has done exceptionally well. It's important to accept that there'll always be some funds performing exceptionally well.
However, one should never forget that it is very difficult to buy the best performing funds before they turn best performing. Also, these funds are many times unable to replicate their outperformance year after year.
So, never compare your fund with the best performing one. Instead, you should try and answer questions like - has your fund done better than an average fund? Will you be okay in sticking to it on a three-four year time frame? And has your fund been a disaster? Besides, I think the most important qualitative thing that you should consider is the stability of a fund manager.
Hence, don't get into this comparison thing that his shirt is whiter than mine. This is because there will always be something like that. Having said that, you have to see that whether your scheme of things like your time horizon, tolerance level, etc., have worked out nicely.