MF Portfolio Doctor: Kumar needs to hike monthly investments by 72% to meet financial 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. Akshay Kumar, 45, is investing mainly in equity funds for his children’s education and marriage, and his retirement. Here’s what the doctor has advised him:

Goals:

Portfolio check-up:

• Goals require additional investment of Rs 63,000 per month.
• Exit from direct equity investments and sectoral funds.
• Hike investments for children’s education and son’s marriage by 10% every year.
• For daughter’s marriage and retirement, hike investments by 20% and 5%, respectively.

Note from the doctor:

• Late start means some goals will have to be downsized.
• Start shifting corpus for daughter’s education from equity to debt 2-3 years before target date.
• Review investments and rebalance at least once in a year.

II. Goals are too ambitious, need to be pruned-
Ranchhod Desai is saving for his son’s education and marriage and his retirement. Here’s what the doctor has advised him:

Portfolio check-up:

• Investing small amounts in mutual funds for past 3-4 years.
• Goals are too ambitious and virtually out of reach.
• Monthly investment need hike of Rs 33,000 to meet goals.
• Will also have to increase SIPs by 10% every year.
• Scale down goals to meet the targets.

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.