mutual fund portfolio: MF portfolio doctor: Why Kumar needs to reduce number of mutual fund schemes in his portfolio

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.

CASE I: Satyendra Kumar is saving for his son’s goals and his retirement. Here’s what the doctor advises.

Portfolio check-up

• Investing in a mix of large-cap, multi-cap equity funds and hybrid schemes.
• Holds too many funds. Needs to consolidate portfolio.
• Targets are too high but can be reached if SIPs increased to Rs 80,000.
• SIPs will also have to be increased by 10% every year.
• Instead of PPF, start contributing to NPS and save tax.

Note from the doctor

• Too many funds already in portfolio. Don’t buy any more.
• Don’t invest too much in small savings. Returns are too low.
• Review investments and rebalance at least once in a year.
• Reduce risk when goal is near so that you don’t miss the target.

CASE II: Manish Pandit is saving for his son’s education and retirement. Here’s what the doctor has advised.

Portfolio check-up

• Invests primarily in ELSS mutual funds to save tax.
• Goals targets seem unrealistic. Review target amounts.
• Child’s study target at Rs 70 lakh seems high.
• Retirement goal at Rs 30,000 a month seems too low.
• Review fund portfolio at least once a year.
• Reduce risk when goal is near so 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.