Mutual Fund Portfolio Review Checklist: 8 Yearly Checks

A mutual fund portfolio review asks one question of every fund you hold: does it still have a job? Most portfolios in India are not built; they accumulate, one SIP, one NFO and one tip at a time, until there are fourteen funds doing the work of five. A review once a year, or after a big change in your life, catches that before it costs you. This checklist takes about an hour with your statement in front of you, and nothing in it requires you to buy or sell anything.

What you need before you start

• Your Consolidated Account Statement (CAS). It lists every mutual fund folio against your PAN across all fund houses. Request it free from CAMS or KFintech, or through MF Central; it arrives by email as a password-protected PDF. If you have never seen one, here is what a CAS contains.
• A list of your goals with dates. Retirement at 60, a child's college fee in 2034, a house deposit in 2029. If you have not written these down, the goals hub walks through the common ones.
• Your current SIP list with amounts and dates, and any lump sums you plan in the next year.

The 8-point mutual fund portfolio review checklist

1. Does every fund map to a goal?

Go down the CAS and write a goal next to each folio. A fund that has no goal is not automatically a mistake, but it needs a reason to stay. Funds bought for a reason that no longer exists (a tax-saving fund past its lock-in that you no longer need for Section 80C, a thematic fund from a year the theme was in the news) are the first candidates for consolidation.

2. Is the asset mix right for each goal's date?

Money needed within three years should mostly sit in debt or arbitrage funds; money needed in ten or more years can carry more equity. Add up your equity, debt, gold and international holdings per goal, not for the whole portfolio, and compare with where the goal's date puts it. The asset allocation calculator shows how the equity share should fall as a goal gets closer. A goal three years away that is still 80% equity is the most common finding in reviews, and the one worth fixing first.

3. How much do your funds overlap?

Two large-cap funds from different fund houses often hold the same thirty companies. Three flexi-cap funds and an index fund can add up to one large-cap fund with four sets of fees. Check the top ten holdings of each equity fund in its latest factsheet; if two funds share more than half their top holdings, you are paying twice for one exposure. Overlap is why adding funds rarely adds diversification after the fifth or sixth.

4. What are you paying?

Three costs matter. The total expense ratio (TER) is deducted from the NAV every day; compare each fund's TER with its category, and read how the expense ratio works if the term is new. The plan type: a Regular plan carries the distributor's commission inside its TER, a Direct plan does not, and the difference compounds over years. We distribute Regular plans and are paid trail commission by the fund house, so you pay us nothing separately; the trade-off between the two plans is explained plainly in Direct or Regular: which plan is better for me? and in our commission disclosure. The exit load applies if you sell within the load period, usually one year for equity funds, so check it before any switch the review suggests.

5. How has each fund done against its own benchmark?

Look at three-year and five-year returns against the fund's stated benchmark and its category average, not at last year alone and not against a fund from a different category. A fund that has trailed its benchmark over five years, through both rising and falling markets, has earned a question. A fund that trailed for one year while its style was out of favour has not. Past performance does not predict future returns; the point of this check is to spot funds that are consistently behind peers doing the same job, not to chase the one that was ahead last year.

6. How many funds do you hold, and how many matter?

Count the folios, then count the ones that hold more than a few per cent of the portfolio. Eight to ten funds cover most households' goals; beyond that, the extra funds usually add overlap and paperwork rather than safety. Small, forgotten holdings (an old NFO with ₹20,000, a closed SIP with ₹8,000) are easy to consolidate into the fund doing the same job. Before selling anything, read when to consider selling a mutual fund and check the exit load and the tax on the gain.

7. Could you live with the fall?

Look up each equity fund's worst one-year fall in its factsheet, apply that percentage to what you hold in it, and ask whether you would have kept the SIP running through it. If the answer is no, the problem is the allocation, not the fund. An emergency fund of six months' expenses outside the market is what lets the rest of the portfolio ride out a bad year without a forced sale.

8. Housekeeping

The unglamorous checks that cause the most trouble when missed:

• Nominee registered on every folio, and the same nominee you intend.
• KYC status valid across all fund houses, especially after a change of address or a new PAN-Aadhaar link.
• Bank mandate active for every running SIP; a lapsed mandate silently stops the SIP.
• Folios consolidated: several folios in one fund with one fund house can be merged into one.
• SIP step-up: if your income rose this year and the SIP did not, raise it. The SIP calculator shows what a 10% yearly step-up adds over a decade.

When to review a mutual fund portfolio

• Once a year, on a fixed date. Many people use the financial year end or their birthday.
• After a life event: marriage, a child, a new job, a loan taken or repaid, an inheritance, a move abroad.
• When a goal comes within three years, to start moving that goal's money towards debt.
• Not after every market fall. A fall changes prices, not goals. Reviewing a portfolio in the middle of a correction tends to produce the one decision a review should prevent: selling the equity meant for a goal that is still ten years away.

What a portfolio review is not

It is not a search for the best fund; there is no such fund, only funds that fit a job. It is not an instruction to churn: a review that ends with every fund replaced has usually found a new story, not a problem. And it is not a return forecast. Mutual fund investments are subject to market risks; the review makes sure the risk you carry is the risk your goals can afford.

Getting the review done for you

If you would rather have the eight checks run by someone who does them every week, Sanriya Finvest offers a free written portfolio review. You share your CAS and your goal list; we return a short written review covering overlap, cost drag, risk fit and the gap to each goal, and talk it through with you. There is no fee and no obligation to move anything. Sanriya Finvest Pvt. Ltd., Pune, is an AMFI-registered mutual fund distributor (ARN-193359); the review is part of our distribution service, and the decisions stay with you.