Khan can retire early by balancing equity and debt allocation in NPS, hiking SIPs in index mutual funds

PORTFOLIO DOCTOR
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 goal.

Irfan Khan and his wife invest for their kid’s studies and retirement. Here’s what the doctor says.

PORTFOLIO CHECK-UP

• Have been investing in equity and hybrid funds for 4-5 years.
• High investments and aggressive allocation have helped build a sizeable corpus.
• Goals are ambitious, but can be reached with disciplined investing.
• Early retirement at 52 will be possible if they continue to invest regularly.
• Some SIPs will have to be increased by 5% every year.
• Portfolio skewed towards small- and mid-cap funds. Be ready for volatility.
• Low-cost index funds in portfolio help reduce overall fund management costs.
• Equity exposure is very high at 50% of portfolio. Shift from some laggard funds to hybrid schemes.
• Put contingency funds in debt schemes to avoid annual tax on interest.

Also read | Marketing professional Koshik can save Rs 30K tax via tax free perks, investing in NPS

Note from the doctor

• In the NPS, opt for a balanced allocation to equity and debt funds.
• Buy life insurance cover of at least Rs.2 crore to safeguard goals.
• Review investments and rebalance at least once in a year.
• Reduce risk when goal is near so that you don’t miss the target.

WRITE TO US FOR HELP
If you want your portfolio examined, write to etwealth@timesofindia.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.