Analysis: My Mutual Fund Investing Journey

This is an analysis of my mutual fund investing journey in particular, the growth of my retirement corpus.  The aim of this post is only to share my insights. The main reason I did this analysis is to explore the possibility of creating a tool to automate this analysis.

My first ever equity investment was on 19th June 2008. The markets were about to crash, but I had no idea about all that simply because I was not looking.


The blue line is my normalized retirement corpus (equity portion alone). Starting from a value of '1' on 19th June 2008, it is currently now '1830'.

Since I had extremely small amounts of equity exposure up to early 2010, the recovery from the 2008 crash did very little to bolster my folio.

When you look at the data as shown above, plotted with BSE 500, it gives the impression that the folio has almost been immune to market movements and has gone up regardless!

The devil lies in the details!


This is my total investments plotted along with the corpus. My investment was '1' on 19th June 2008 and has increased to '1429'.

So much of the corpus growth has been due to investments which shot up rapidly in 2010.


Now gain or loss has been added. Notice that the folio was in red for more than 5Y after I started investing. The gains started only in Aug 2013 when the market started to move up.

The net XIRR of this folio is 11.1% (12 Feb 2016).

Personally, I am at peace with this. All I have done is to put away money into the market each month. Close to 8 years of doing this has taken me to within 7-8 years of (notional) financial freedom: Retirement Planning: My Story So Far

So I see no reason to do anything different. Freefincal tools have helped me understand risk more than anything else.


My takeaways from this journey:

  • Market returns are highly irregular. The corpus gain shot up from zero to 600 in a little more than a year.
  • The main reason for this gain: systematic increase of capital in the market during the lean period. To me, this is the secret  behind wealth creation with systematic investing.
  • Keep your head down, ignore the noise and constantly deploy money into the markets.
  • All the gains made so far can evaporate in this 'crash'. However, that is because of NAV movement, not because of decrease in mutual fund units.
  • My technical retirement is 24 years away. So even if I do miss my 7/8Y target, I do not mind too much.
  • People talk about a poor show in 2016 and then markets picking up. If that is true (rarely is), then I don't think my target will be affected.

The main reason I write this is to illustrate the point that one has to wait patiently for gains to arrive. Some say it is 'stupid' to do this - active management is essential.

I believe active management is essential too. I have actively analysed my portfolio and I have made an active choice that my dull and boring systematic monthly investments are going to continue.


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19 thoughts on “Analysis: My Mutual Fund Investing Journey

  1. Vandhi

    "All the gains made so far can evaporate in this 'crash'. However, that is because of NAV movement, not because of decrease in mutual fund units."

    Pattu ,
    I do not understand what is the meaning of NAV movement ,and not decrease in MF units. So far i thought both of them are related to be same.

    1. freefincal

      When we buy 1000 units of a fund at NAV = 10 per units, we make gains only if the NAV moves up (and if the units are not redeemed). My point is, even if the NAV falls and gains become -ve, if I do not redeem the units, I will get gains once the NAV moves up. So we need to wait for markets to move up.

  2. Renga

    Dear Pattu,

    I know you are doing manual SIP, can you please help us understand how do you decide when to invest? I.e., how are you catching lean period?

      1. Renga

        Ok, I thought you don't do monthly automatic SIP. Are you saying you do monthly SIP + when you see some lean period you top it up? Sorry to ask specific question, I was just curious to know your process.

  3. Anand

    Thanks Pattu.
    Can you please share this tool and if it is able to import the xls from valueresearch. Keeping the investments/returns at various points in our investing journey is one area that is difficult to get by and this post truly fulfills that need!!

    1. freefincal

      That is what I am trying to do, but this is a monster calculation and took me several hours to complete over 2 days. I will see what I can do.

  4. Maries


    I have questions regarding benchmarking our investment with index. When I am doing SIP, I put all my funds in growth fund instead of dividend/ dividend reinvestment. When I want to benchmark my returns with index, I should include dividends of my index to the calculation. For Nifty 50 index we can get the dividend inclusion by using Nifty 50 Total return index. But for CNX 500 we don't have any total return index. While benchmarking your returns did you consider dividend for the index. I have a question also whether morningstar, valueresearch and the mutual fund reports is considering dividend of the index while benchmarking. Can you give a clarification on this.


    1. freefincal

      I do not benchmark returns that way for my portfolio. If you want, you can use TRI for BSE 500 from the S&P website

  5. nagakrishna

    Sir, would like to know if we invest money in balanced fund like hdfc balanced fund or icici prudential balanced advantage fund, if I withdraw after one year, will I need to pay any tax on the gains if any.

    I am in 30% tax bracket. ex. If I invested 1000 and after year, the redemption gave me 1100, Do I need to pay any tax on Rs.100

    1. Anand Vaidya

      Balanced funds keep the proportion of equity:debt to 65:35 which qualifies for Nil LTCG. (simplistic explanation), these are considered as equity funds for STCG/LTCG calculations

      So, yes, any withdrawal AFTER 12months will be tax-free as of now.

      But do watch the budget 2016. The gov is rumoured to be planning to levy LTCG for all funds or raise the time limit from 1Y to 3Y.

  6. sorabh

    Very nice article pattu.. i was really looking forward to how are your investments doing... thank you for sharing your personal story ..... it puts things in perspective and congratulations for being able to actively manage your funds for 8 loonng years....

  7. nitin

    Am I right in saying that if you had started your investment with 1000/- ie. normalized retirement corpus as 1, it has now got the value of 18,30,000/-?

  8. Suhas

    Hi Pattu,

    I need to get these graphs?, how can i do it? I have the details of my investments month on month basis in a excel sheet


    1. freefincal

      Suppose you invest in fund A on a,b,c dates and fund B on d,e,f dates. You will need the value of both funds on all six dates.


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