Not many investors know whether they have invested in the right funds and if their fund portfolio is on track. The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures.

The advice given is based on the performance of the funds, the risk profile of the investor as well as his financial goals.

I: Sanjeev Naik is saving for his child’s education and retirement. Here’s the doctor has advised him:

Goals

231


Investor’s existing portfolio

232

Portfolio check-up

  • Investing in equity funds for past 7-8 years.
  • Funds are well chosen, but portfolio has too many of them.
  • Education goal is too high at Rs 1.75 crore. Will take up entire fund portfolio.
  • All SIPs will also have to be hiked by 10% every year.
  • Retirement target too low at Rs 50,000 a month. Hiked by 50% to Rs 75,000.

Note from the doctor

  • Avoid deposits because interest is fully taxable. Debt funds attract lower tax.
  • Opt for maximum allocation to equities in NPS.
  • Review investments and rebalance at least once in a year.
  • Reduce risk when goal is near so that you don’t miss the target.

II: Increase SIPs by 10% every year to reach ambitious target
Sayan Das wants to save Rs 1.5 crore for his retirement after 31 years. Here’s what the doctor advised him:
Goals

233

Investor’s existing portfolio

234

Portfolio check-up

  • Started investing recently in equity funds.
  • Goal of Rs 12 crore seems daunting but can be reached by hiking SIPs 10% every year.
  • Has not mentioned other retiral savings like PPF, Provident Fund or NPS.
  • Should also start investing in NPS to save for retirement.
  • Review mutual fund portfolio at least once a year. Change if any fund’s performance slips.
  • Reduce risk when goal is near so that you don’t miss the target.

Assumptions used in the calculations

Inflation

Education expenses: 10%

For all other goals: 7%

Returns

Equity funds: 12%

Debt options: 8%

Portfolios analysed by Raj Khosla, Managing Director and Founder, MyMoneyMantra


Write to us for help

If you want your portfolio examined, write to etwealth@timesgroup.com with “Portfolio Doctor” as the subject. Mention the following information:
Names of the funds you hold.
Current value of the investment.
If you have SIPs running in any of them.
The financial goals for which you invested.
How much you need for each financial goal.
How far away is each goal.

Read more: EconomicTimes

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