Every month, your mutual fund company sends you a statement that most investors glance at and ignore. That is a mistake. Your statement is the single most useful document for understanding whether your investments are doing what you hired them to do.
The header: who, what, when
The top of every statement carries four pieces of information you should verify: your name, your folio number, your PAN, and your nominee. Errors here can cause headaches later — fix them immediately with your distributor or the AMC.
Units, NAV, and value — the core trio
Units held: The number of fund units you own. SIPs add fractional units every month.
NAV (Net Asset Value): The per-unit price of the fund. NAV × Units = your current investment value.
Current market value: The headline number — what your investment is worth today.
XIRR vs. absolute return
Most statements show “Absolute Return” prominently. Be careful — absolute return is misleading for SIP investors. The right measure is XIRR (Extended Internal Rate of Return), which annualises your returns accounting for the timing of every cashflow.
What to check every month
A two-minute monthly review should answer four questions: Are all my SIPs going through? Is the total portfolio value moving in line with the markets? Has any new transaction appeared that I did not initiate? Are my nominee details still correct?
A common mistake to avoid
Investors often panic-redeem when they see a negative return on the statement. Your statement shows a snapshot, not a verdict. Equity mutual funds are designed for 5+ year horizons. A one-year red number means very little.
Klik News Personal Finance