MF Portfolio Doctor: Nagarkar should not switch mutual fund schemes based on recent returns

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.


CASE I: Dinesh Sonawane invests in a mix of equity funds for his goals. Here’s what the doctor has advised:

Investor's existing portoflio

Portfolio Check-up

• Holds a focused portfolio of mid, large-cap and multicap funds.
• Funds are good but targets are too high. Must hike monthly SIPs by Rs 30,000.
• SIPs also have to be hiked by 5-10% every year to meet targets.
• Direct stocks riskier than funds. Hold the bluechips in portfolio.
• World tour not included in goals due to lack of surplus.

Note from the doctor

• Don’t buy insurance as investment. The returns are very low.
• Review investments and rebalance at least once in a year.

CASE II: Praveen Nagarkar is saving for his marriage and his retirement. Here’s what the doctor has advised:

Investor's exisitng portfolio

Portfolio check-up

• Investing in equity funds for past two years but increased SIPs this year.
• Goal of retiring at 50 will need bigger corpus and higher investments.
• Don’t buy too many funds. Switching funds based on 1-2 year returns won’t help much.
• Buy a term insurance cover of Rs 2 crore immediately.
• Review investments and rebalance at least once in a year.
• Reduce risk when goal is near so that you don’t miss the target.

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.