Do you have difficulty tracking your Investments?
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Here’s a problem of plenty! What do you do when you find that you have fifty odd Mutual Fund schemes that you have invested in and are not able to keep track.
It must have been really tough to keep track of all these schemes on a weekly or monthly basis.
There was a time when people would throng to NFOs, confusing them with initial public offer (IPOs) of companies. They assumed that since the share which gets listed on IPO price mostly zoom to new highs in no time, the same would happen with mutual fund NFOs, too.
But mostly people have figured out that it wouldn’t happen in the case of mutual fund schemes. This is because the scheme is collecting money to invest and its net asset value (price of a mutual fund unit) will go up only after the appreciation of investments.
However, some of us are quick to clarify that they invest in NFOs mainly because of their interesting themes. For example, we finds global gold scheme or a commodity scheme very attractive. However, this is permitted only if a small percentage of the corpus is used for this purpose. Otherwise, it could lead to complications.
Also, without realising we take a large exposure to the particular sector, say infrastructure sector.
Our expert was finding it difficult in deciding which schemes to get rid of because of the presence of many schemes with very little track record.
According to financial advisors, this is not a rare problem. To begin with, they say, an investor should try to invest in a diversified scheme with a performance record of at least five years. After that, they can invest a small portion of their corpus to sectors like commodity, infrastructure, pharma and so on. However, they should remember that a sector is a risky investment option as it may go t h ro u g h p h a s e s of high and low. Lastly, under no circumstances you should have more than six schemes in your portfolio.
Otherwise, monitoring them could be a problem.
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