MF portfolio doctor: Darshana must restart mutual fund SIPs, increase investment to reach goals

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. Darshana is investing for her child’s education and retirement. Here’s what the doctor advised her.


Goals

Portfolio recommendations

Portfolio check-up

• Investing small amounts in equity and hybrid funds.
• Stopped SIPs in many funds when markets were buoyant.
• Corpus has not grown due to stopped SIPs. Must restart now.
• Both goals require big increase in monthly SIPs.
• Will also have to increase SIP amounts by 10% every year.

Note from the doctor

• Has not mentioned Provident Fund or maturity value of insurance policy.
• Retirement goal must be deferred if target not met in 15 years.
• 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. Vivek Sharma is saving for his daughter’s goals and retirement. Here’s the doctor’s advice to him.

Goals

Portfolio recommendation

Portfolio check-up

• Investing in equity funds through SIPs for past 4-5 years.
• Focused portfolio has performed well but amount still too low.
• Goals are ambitious so must increase SIPs 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.

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.