An annual portfolio review keeps your investments aligned with your goals, ensures your asset allocation is appropriate, and catches any issues before they compound. For most Australian investors, a once-per-year review (ideally at the end of the financial year in June or the start of a new year) is sufficient. Here is a practical framework for what to check.
Why Annual Reviews Matter
Without periodic review, your portfolio can drift from its target allocation, your circumstances can change without your strategy adapting, and avoidable costs (high-fee funds, duplicate accounts) can quietly erode returns. An annual review need not take more than an hour — but it can significantly improve long-term outcomes.
Step 1 — Calculate Your Actual Returns
Start by determining how your portfolio has actually performed over the past 12 months.
What to measure:
- Total return = capital growth + dividends/distributions received
- Net return = total return minus fees and taxes
- Compare against a relevant benchmark (e.g., ASX 200 total return for an Australian shares portfolio)
Tools to use:
- Sharesight (popular in Australia — automatically tracks returns and generates tax reports)
- Your broker’s portfolio performance report (available on most platforms)
- Simple manual calculation: (End value − Start value + Distributions received) ÷ Start value
Note: One year of returns is not a meaningful performance indicator for long-term investments. Five and ten year returns are more useful. Do not over-react to a single good or bad year.
Step 2 — Check Your Asset Allocation
Review what you actually hold versus what you intended to hold:
| Asset class | Target allocation | Current allocation | Action required? |
|---|---|---|---|
| Australian shares | 30% | 35% | Slight over-weight — monitor or rebalance |
| International shares | 50% | 47% | Slight under-weight — add here with next contribution |
| Bonds | 20% | 18% | Minor under-weight — add here with next contribution |
If your actual allocation has drifted more than 5–10% from your target in any asset class, consider rebalancing. See our Portfolio Rebalancing Guide.
Step 3 — Review Your Fees
Check the management expense ratio (MER) of each fund you hold:
| Fund | MER | What you pay on $100,000 |
|---|---|---|
| A200 (Betashares Australia 200 ETF) | 0.07% | $70/year |
| VGS (Vanguard MSCI International) | 0.18% | $180/year |
| VDHG (Vanguard Diversified High Growth) | 0.27% | $270/year |
| Typical active managed fund | 0.80–1.50% | $800–$1,500/year |
If you hold any actively managed funds with fees above 0.5%, evaluate whether they have justified those fees with consistent outperformance after tax — most research shows they have not over long periods.
Step 4 — Review Your Super
Your superannuation is part of your overall investment portfolio. Check:
- Investment option: Is it appropriate for your time horizon? (A 35-year-old in a conservative option may be leaving significant long-term growth on the table)
- Fees: Compare your fund’s fees against industry benchmarks (the ATO’s YourSuper comparison tool is a useful resource)
- Insurance: Are you paying for life/TPD/income protection insurance inside super that you do not need or need to adjust?
- Multiple accounts: Do you have super with old employers? Consolidate to avoid paying multiple sets of fees and insurance
Step 5 — Review Your Goals and Life Circumstances
Your investment strategy should reflect your current life situation, not the circumstances of 5 years ago:
| Life change | Strategy implications |
|---|---|
| New baby or dependants | Review insurance, emergency fund |
| Promotion or income increase | Increase contribution rate, review super salary sacrifice |
| Marriage or partnership | Review joint financial goals, beneficiary nominations |
| Approaching major goal date | Begin shifting to more defensive assets if needed |
| Job loss | Review contribution sustainability, avoid unnecessary selling |
Step 6 — Tax Check
Before 30 June each year:
- Are there any capital losses in your portfolio that could be harvested against capital gains?
- Have you considered the timing of asset sales relative to the 12-month CGT discount threshold?
- Have you checked that your TFN is registered with all investment accounts (to avoid withholding tax)?
- Are your investment expenses properly documented for tax deductions?
Step 7 — Set Goals for the Next 12 Months
End each review by setting clear actions for the coming year:
- Target contribution amount per month
- Target allocation (if any change is appropriate)
- Any accounts to open, close, or consolidate
- Insurance review date
- Super fund or investment option changes
Annual Review Checklist
| Task | Done? |
|---|---|
| Calculate total return for the year | ☐ |
| Compare to benchmark | ☐ |
| Review actual vs target asset allocation | ☐ |
| Consider rebalancing if drift > 5% | ☐ |
| Review fees — each fund’s MER | ☐ |
| Review super investment option and fees | ☐ |
| Check for multiple super accounts | ☐ |
| Review insurance coverage | ☐ |
| Tax review before 30 June | ☐ |
| Update goals for the next 12 months | ☐ |
Related Articles
- Portfolio Rebalancing Australia
- Asset Allocation by Age Australia
- How to Set Investment Goals in Australia
- ETF Tax Australia
- Getting Started hub
- Investing hub
Frequently Asked Questions
How often should I review my investment portfolio? Annually is sufficient for most long-term investors. More frequent reviews (monthly, weekly) can encourage emotional decision-making and distract from the long-term strategy. A quarterly check of the balance is fine — but a deep review once per year is all that is needed.
What if my portfolio has significantly underperformed the market? If your portfolio has materially underperformed the relevant benchmark for 3+ years after fees, investigate why. Common causes include: high-fee active funds, inappropriate asset allocation, or currency effects on international holdings. A one-year underperformance is rarely meaningful in isolation.
Should I change my ETFs if a better one is released? Switching ETFs has costs — brokerage fees and potentially capital gains tax on any unrealised gains. Before switching, calculate whether the fee saving or other benefit of the new fund outweighs the switching costs. Often, continuing to hold an existing ETF and buying the new fund for future contributions is a better approach than selling and switching.
This article provides general financial information only. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.