Come Diwali, and Sneha, a 38-year-old boutique owner in Lucknow, starts cleaning every corner of her home. Cupboards get emptied, newspapers get sorted, all diyas and lamps get polished. Everything that gets accumulated over the year gets cleaned up before Diwali. Last year, she decided to apply this annual cleaning ritual to everything in her life, including her finances. That’s when Sneha realised that she had started SIPs in five different funds over eight years ago, mostly on friends’ advice, and had barely looked at them since. She  

This Diwali, try Sneha’s five-point clean-up on your own portfolio, it shouldn’t take more than an hour. 

1. Check your nominee and contact details 

Open your latest statement and confirm that every folio has a nominee. Make sure your mobile number, email and bank account are correct too. A missing nominee can slow down your family’s access to your money when they need it most. 

2. Check your asset allocation 

Evaluate your share of equity, debt, and other investments in relation to your financial goals and the time horizon you have set for yourself. 

3. Check what you’re paying 

Look at whether you hold a regular plan or a direct plan. Regular plans include a distributor’s commission, so they charge a higher yearly fee. If you bought through a bank or agent, you may be in a regular plan. Compare the expense ratio of both versions of your fund before deciding. Switching can have tax implications, so check them first. 

4. Check for overlap 

Five funds are not always five different bets. Many large-cap and flexi-cap funds hold the same top companies. Look at the top 10 holdings in each fund’s factsheet. If the same names keep appearing, you may be paying several fees for what is really one portfolio. Sneha found that three of her five funds were almost the same. 

5. Check if your funds are aligned to your goals 

Write down what each fund is for: your daughter’s college fees, a home, retirement. A fund with no purpose is hard to hold through a market fall. Also ask whether you have an emergency fund covering around six months of expenses, kept outside your equity funds. 

Your Quick Checklist 

Conclusion  

After her clean-up, Sneha moved from a regular to a direct plan, merged her overlapping funds into two, and gave each a goal. She also added her nominee to the folio that had none. Her SIP amount stayed the same, but her portfolio finally made sense to her. 

This year, as you start your Diwali cleanup and light your diyas, give your money the same attention you give your home. 

Disclaimer: 

SEBI Registration No.  MF/020/94/8

An Investor education and Awareness initiative of Aditya Birla Sun Life Mutual Fund.

All investors have to go through a one-time KYC (Know Your Customer) process. Investors to invest only with SEBI registered Mutual Funds. For further information on KYC, list of SEBI registered Mutual Fund, and redressal of complaints including details about SEBI SCORES portal, visit link: https://mutualfund.adityabirlacapital.com/investor-education/education/kycand- redressal for further details. Investors may lodge their complaints with SEBI through the SCORES portal (SEBI Complaints Redressal System) at https://scores.sebi.gov.in/. 

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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