How to avoid reviewing the financial portfolio incorrectly



Carefully analyze your consolidated mutual fund account statement to avoid miscalculations

Being a person of habit and discipline, certain habits are difficult to give up, regardless of the current pandemic crisis. One of those habits is looking at my portfolio of financial assets to find out where I am, in terms of financial goals and objectives. Although I review it often, it was easier at the start of the 2021-2022 fiscal year as it gave me a clear picture of my tax investments.

When it comes to revising, I prefer to keep it as simple as possible by counting my investments that I have in various assets. It includes fixed deposits (FD), public provident funds (PPF), recurring deposits, savings deposits, insurance (health and life), stocks and finally mutual funds. It sounds like a lot, but it’s just my way of taking each financial asset into account and analyzing it separately and then summarizing it with the total assets and returns to date that I have earned.

Having said that, reviewing all of my deposits, company shares, and PPFs comes in handy since they’re all linked to my same bank account. With the click of a mouse, I get a detailed review of the available balance of all my deposits, the amount due and my total investment as a whole. Since I have annual premium plans, it is not that difficult to review my insurance plans. However, I plan to take out family allowance insurance plans for my daughter’s higher education in the years to come.

The same goes for the mutual fund as I have three mutual fund portfolios, which I receive via eCAS, which is sent in an email to my valid email id recorded in the Know Your records. Customer (KYC). According to the Securities and Exchange Board of India (SEBI), mutual fund companies are required to issue a Consolidated Account Statement (CAS) for each calendar month to unitholders of mutual funds, who have completed a transaction financial during that month in a paperless form.

Going through my account statement, my CAS only highlighted the mutual fund transaction I made during the current month i.e. April and not the balances of the other two. active portfolios, which I completely forgot. This led to the mismatch of my total past investments in mutual funds with the current investments during the review.

CAS can be a very useful tool for better investment management strategy and better tax planning; However, such misunderstanding and skipping minor details can hurt your review process if not done carefully. In accordance with SEBI guidelines, an investor’s monthly CAS only includes portfolios where financial transactions took place during that month.

So if I have three wallets and have done a financial transaction in one, then the CAS will only show that active wallet and not the other two. In addition, in the event of absence of any financial transaction, as an investor in mutual funds, no CAS will be issued for that month.

It is crucial to remember that only those investors are subject to the received CAS, the PAN details of which have been updated in the portfolio. That said, it is imperative that the next time you review your mutual fund portfolio, remember past statements. Ultimately, we learn from our mistakes!



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