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Whether you’re investing for your future, a rainy day, or the down payment of a house, having the right type of mutual fund can help aid your financial goals, but it’s not as simple as just buying one and forgetting about it. In fact, there are several details you need to know about your mutual funds that could make a big difference in their performance over time. That’s why tracking your investments with mutual fund services is so important. Here are some reasons why you should consistently track the performance of your mutual fund investments.
Know the Past Performance of Your Mutual Fund
Mutual funds are a portfolio of stocks, bonds or other assets that are bought and held by investors as one unit. This means that when you buy a mutual fund, you don’t actually own shares of each company in the fund. Instead, you own shares in the fund itself. This makes mutual funds a type of investment, or asset, that you can buy and sell as needed. The value of your investment will depend on several factors, such as the fund’s performance and the fund’s net asset value (NAV). To help you determine the right fund for your financial goals, it’s important to know the past performance of your mutual fund. A fund that consistently beats market expectations probably means that it is built on good fundamentals, and has evolved with market conditions over time, which is a good indication for the future as well, though by no means a guarantee.
Track Your Mutual Fund Investment Costs
The investment costs for your mutual fund can greatly impact the fund’s performance over time. The money you pay to buy shares in a mutual fund goes toward a variety of expenses, such as the fund manager’s salary, administrative costs, and other fees. Mutual fund fees are typically listed as an annual percentage of the fund’s NAV. This is how a fund’s expenses are broken down and charged against the fund’s NAV. The fees may range from less than 1% for large funds to more than 5% for smaller funds. This is why it’s so important to track your mutual fund investment costs. By knowing what the fees are, you can see how they affect the fund’s NAV over time. This can help you determine if the fund is right for you.
Track the Current Value of Your Mutual Fund Investment
The NAV of a mutual fund is the price that investors would receive if they sold their shares in the fund today. This can help you determine the value of your investment over time. However, the NAV doesn’t track the share price of your actual investment. The NAV and the price of the fund can vary over time. Tracking the current value of your mutual fund investment can help you see how the market has affected the fund’s price over time. This can help you determine if the current price is above or below what you paid for it, which can help you understand if now is the right time to sell your shares.
Monitor the Asset Allocation of Your Mutual Funds
The asset allocation of a mutual fund is the percentage of each fund’s investments in stocks and bonds. Many funds are managed by one manager who decides what percentage of each fund goes toward stocks and bonds. Some funds might also allow investors to choose how much of their investment goes toward each type of investment. Mutual funds with a variety of assets are called diversified funds. These funds are designed to help lower your risk of losing money during a downturn in the market by investing in stocks. Other funds are called non-diversified funds, or single-sector funds. These funds focus their investments on one particular type of asset, such as real estate, U.S. government bonds, or emerging market stocks. It’s important to monitor the asset allocation of your mutual funds to make sure they’re still a good fit for your investment goals. This will help you decide if it’s time to sell and find new funds.
Check for Fee Transparency and Ongoing Fees
As you track your mutual fund solutions, you’ll also want to check for fee transparency. This is when a fund’s management team fully discloses all of the fees that affect your NAV. Some funds may have management fees that are charged on a quarterly or annual basis and are taken out of the NAV, lowering the value of your investment. There are also performance fees that are taken out of the fund’s profits, on top of the management fees. These fees can vary greatly from fund to fund, so it’s important to check for fee transparency and ongoing fees. This will help you determine if the fees are worth it for the fund’s performance.
Summing up
Investing in mutual funds can be a great way to help reach your financial goals. However, you should check your investments to make sure they’re on track with your financial plan, which you can easily do with the KFinkart Investor Portal and Mobile App, a unique new mutual fund solution that lets investors like you track your investments. This includes knowing the past performance of your mutual funds, tracking their current value, monitoring their asset allocation, and checking for fee transparency and ongoing fees. This will help you determine if it’s time to sell and find new funds.
