MF portfolio doctor: Kalra should slowly move out of equity for child's education 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. Sanjeev Kalra has been saving in a mix of diversified and sector equity funds for his children’s education and marriage and his own retirement. Here’s what the doctor has advised him:

Goals:

Portfolio check-up:
Started investing in equity funds five years ago.
Has invested in good mix of diversified equity funds.
All goals can be reached by small increases in SIPs. One goal is very near so needs to reduce risk.
Investments for child’s education will grow to Rs 20 lakh. Will need to borrow Rs 5 lakh.
Required investment could be lower if investor has PF, other investments.

Investor’s existing portfolio

Note from the doctor:
Don’t buy too many funds or sectoral schemes. Diversified funds are best.
Review funds and rebalance at least once in a year.

II. Don’t get unnerved by short-term losses-
Sammir Naik has not specified a goal but has long-term plans. Here’s what the doctor has advised:

Goals:

Portfolio check-up:
Started investing in equity funds about 15 months ago.
Funds are good but investor is worried by negative returns.
No need to worry about notional losses. Continue SIPs as planned.
Review portfolio at least once a year. Change if any fund’s performance slips.
Increase SIP amount by 5-10% every year in line with increase in income.

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.