Why It Is Necessary To Review Your Mutual Fund Portfolio Year After Year

 Mutual Fund Portfolio A lot of Indian investors buy Mutual funds looking at just one factor that is past returns. Yes, it is one of the important factors but not the only factor.

Secondly, it becomes much more prudent to change the non performing funds in the Portfolio.

Lets take a real time experience.

A few years back i.e 3 years, a lot of people & MF advisors were betting on

  • SBI Magnum Tax Gain Fund
  • SBI Magnum Contra Fund
  • JM Basic Fund

I completely agree these were the one of the best funds during those times but just have a look at the performance of those funds  vis-à-vis good funds in 2010

Fund Name Returns % in 2010
SBI Magnum Contra Fund 8%
SBI Magnum Taxgain Fund 11%
JM Basic Fund -15%
HDFC Mid Cap Opportunities 31%
HDFC Top 200 Fund 25%

A learning from the above article is that you must review  your MF portfolio after every 6-8 months from a Portfolio Manager

Why these funds were not able to perform

The above mentioned funds were not able to perform because of the defensive positioning even when the market was rallying. An interesting feature to know about these non performing funds is that they are more inclined to companies that have disproportionately large market share

Regards

Mayank Gupta

Wealthbazaar.in

MBA Finance

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