MF portfolio doctor: Gupta should set specific money goals instead of one omnibus goal

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: Saurabh Kumar is saving for his kids’ goals and retirement. Here’s what the doctor advised him:

Goals

Investor's existing portfolio

Portfolio check-up

• Investing in funds for past two years ago.
• Funds have performed well. Only a few changes required.
• Scale down children’s goals if unable to hike SIPs 10% every year.
• Can’t save Rs 1 crore for house. Target 30% and take loan for balance.
• Avoid sectoral funds; diversified schemes are more stable.

Note from the doctor

• Don’t avoid equities for retirement. Reduce PPF contribution instead.
• Opt for maximum allocation to equity in NPS.
• Review and rebalance at least once in a year.
• Reduce risk when goal is 1-2 years away.

II: Set specific targets instead of one omnibus goal
Gopal Kumar Gupta wants to accumulate Rs 5 crore in 25 years for an unspecified goal. Here’s what the doctor has advised him:
Goals

Investor's existing portfolio

Portfolio check-up

• Started investing in ELSS some years ago. Now investing in mix of flexi, large and small cap funds.
• Has no defined goal other than wealth creation.
• Instead of a single goal, should save for specific targets with defined timelines.
• Increase SIP amounts by 10% every year to reach target amount.
• Review fund portfolio at least once a year. Change if any fund’s performance slips or change in mandate.

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.