MF Portfolio Doctor: Sudheendra will have to increase equity exposure to meet 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. Increase equity exposure and defer retirement date
B. Sudheendra invests Rs 1.25 lakh a month for multiple goals. Here’s what the doctor advises:

Goals:
1. Buying a car: 18 months
Present cost: Rs 15 lakhFuture cost: Rs 16.5 lakh2. Constructing house: 3 years
Present cost: Rs 36 lakh
Future cost: Rs 45 lakh

3. Daughter’s education: 12 years
Current need: Rs 8 lakh
Corpus required: Rs 25 lakh

4. Son’s education: 15 years
Present cost: Rs 8 lakh
Future cost: Rs 33.4 lakh

5. Daughter’s marriage: 19 years
Present cost: Rs 30 lakh
Future cost: Rs 1.3 crore

6. Son’s marriage: 23 years
Present cost: Rs 30 lakh
Future cost: Rs 1.76 crore

7. Retirement: 15 years
Present cost: Rs 75,000 (pm)
Future cost: Rs 4.3 crore

Investor’s existing portfolio

Portfolio check-up

* Equity exposure is less than 25%. Needs to hike it to 40%.

* Also holds stocks. Should avoid direct investment.

* Money idling in bank account can earn more with sweep-in account.

* Too much allocated to ultra short-term debt funds.

* Increase SIPs by 10% every year in line with rise in income. May have to defer retirement goal by 4-5 years.


Note from the doctor

* Avoid investing in gold funds. Returns are very poor.

* Review investments and rebalance at least once a year.

* Reduce risk when goal is near so that you don’t miss the target.

II. ELSS funds can help reach all goals
Tamal Guha saves for his son’s education and marriage, and his retirement. Here’s what the doctor advises:

Goals:

1. Son’s education: 16 years
Present cost: Rs 8 lakh
Future cost: Rs 36.75 lakh

2. Son’s marriage: 26 years
Present cost: Rs 10 lakh
Future cost: Rs 74 lakh

3. Retirement: 28 years
Current need: Rs 75,000 (per month)
Corpus required: Rs 9.6 crore

Portfolio check-up

* All funds in portfolio are ELSS schemes.

* Plans to increase SIPs by 7% every year.

* Early start means all goals can be reached.

* Reduce risk as goals approach by cutting equity exposure.

* For long-term goals, review progress at least once a year.

Portfolios analysed by:
Raj Khosla, Managing Director and Dounder, MyMoneyMantra

Write to us for help
If you want to get your fund portfolio examined, write to us at etwealth@timesgroup.com with "Portfolio Doctor" as the subject. Mention the following information clearly:

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