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    MF portfolio doctor: Mathur can reach goals easily, but needs to reduce clutter in his portfolio

    Synopsis

    The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals.

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    You should review your mutual fund portfolio at least once a year.
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    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.

    1. Pranav Mathur saves for his child’s goals and retirement. Here’s what the doctor has advised him:

    Goals

    27-1

    Portfolio check-up

    • Initially invested in ELSS funds. Started SIPs in equity schemes 3-4 years ago.
    • Invests a sizeable Rs 76,000 in equity funds every month.
    • Early start and aggressive savings have helped accumulate big corpus.
    • Holds too many funds, many of which are consistent underperformers.
    • Retirement and other goals can be reached by small 5% hike in SIPs every year.

    Investor’s existing portfolio

    27-2

    Note from the doctor

    • Don’t invest in too many funds. Avoid buying yearly winners.
    • Also avoid sector funds. Diversified funds are better.
    • Review investments and rebalance at least once in a year.
    • Reduce risk when goal is near so that you don’t miss the target.

    || Raise SIPs to Rs 10,000 a month
    Hardik Patel wants to accumulate Rs 35 lakh in 15 years. Here’s what the doctor has advised him:

    Goals

    27-3


    Investor’s existing portfolio

    27-4

    Portfolio check-up

    • Target is too ambitious given the current investments.
    • Increase monthly investment to Rs 10,000 to reach goal.
    • All SIPs must also be hiked by 10% every year.
    • 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)

    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.
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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