How to monitor your investment portfolio

Staci West 09/02/2023 in Basics

Managing an investment portfolio requires commitment. You need to keep a close eye on your investments to know when to make changes. The crucial first step in this process is understanding exactly what you have in place, the likely returns, and the overall risk you are taking.

But what does this process actually involve? How do you analyse existing holdings? Are there tell-tale signs that can indicate the potential volatility?

Here we take a look at what you need to know about your holdings to put you in the best possible position to manage your portfolio effectively.

Why should I review my investment portfolio?

There are many reasons why it makes sense to take a fresh look at your overall portfolio, especially if it’s been many years since you put it together. For example, you may be holding stocks and investment funds that no longer meet your needs and objectives. In fact, some of these could actually be losing you money.

The overall weightings between different asset classes may have shifted over time, meaning you have higher exposure than you’d like in different areas. Similarly, the portfolio may have become too concentrated in one particular area, meaning you’re less diversified than you’d imagined and embracing greater risk.

How often should I assess my investment portfolio?

We generally suggest that you review your investment portfolio once or twice a year. This may increase if you have a life event that may change your priorities, or if markets go through a period when they either rise or fall significantly.

Where do I start?

The first step is listing all the various investment funds and individual stocks you hold, along with how much money you have in each of them. Remember, if you have multi-manager funds then you’ll need to source a list of the various portfolios that each one of them holds.

Only when you have a full breakdown of what you own – either directly or indirectly via funds – will the full picture of your exposures become clear. At this point you can start to analyse them in greater detail. The good news is most investment platforms will be able to do much of this task for you – have a play around with the tools your provider has online and see what you can do.

Assessing individual stocks

If you’re holding shares in companies, it’s time to revisit these decisions. Bear in mind how long you’ve held the stocks and your reasons for buying them originally. Was it for the dividends you expected to receive? Did you buy into a story and has that story played out now?

Take a look at each position and compare what they’ve achieved with what you expected. Have they delivered on their promises? Or has the result been underwhelming? At the end of the day, the price will dictate the overall value of your holding in a business. Has it risen, fallen or stayed the same?

Read what analysts are expecting. Do they believe the stock price will soar over the next few years or are they predicting tougher times ahead?

Assessing fund positions

Every investment fund regularly provides detailed information on their holdings. This information is usually published on a monthly and quarterly basis on their “fund factsheet”.At the very least, you can expect them to supply a breakdown by market capitalisation and country exposure, along with a list of the 10 largest positions. Some provide even more detailed information on stock holdings, while others will list the stock names that have been positive – and negative – for the overall portfolio.

The latest factsheets for FundCalibre’s Elite Rated funds can all be found on the fund note page.

Assessing asset allocation

The next step is to break your overall portfolio down by asset allocation. For example, what percentage is in equities and fixed income? Do you have commercial property holdings? Have you any so-called alternative assets, such as gold and other commodity holdings? Once you have these lists you can start to delve further and analyse holdings in each of the asset classes on a more in-depth level.

Assessing fixed income allocations

While fixed income positions are generally regarded as being safer than equities, this largely depends on the exposures of the investment funds. Look to see whether these positions are in government bonds – and if the countries issuing them are regarded as a good risk by credit agencies.

As far as corporate bond holdings are concerned, you need to assess whether they are investment grade or high yield, the latter being riskier but offering higher potential returns.

Assessing equity country allocation

Within the equity holdings, you should also examine your overall country allocation. Which regions do you have most of in your portfolio? Europe? North America? Asia?

Similarly, have you got a broad spread of country exposures or are you mainly focused on a relative handful? For example, if you have 90% of the portfolio in one country, that’s potentially risky. If the stocks in that country perform outstandingly well, then you’ll benefit. However, if they disappoint, then your portfolio will take a substantial hit.

Assessing market capitalisation exposure

You should also consider what types of companies your funds are invested in. Have you got a bias towards particular capitalisations: large, medium, or small? Generally, more focus on smaller businesses means you’re probably taking on a higher degree of risk as these firms are generally at the growth stage and less followed by analysts.

However, while larger cap names are seen as more established and reliable, the chances of them surprising on the upside is less, as every move they make is closely monitored.


Photo by Jaime Dantas on Unsplash

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions.Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice.Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.