MF Portfolio Doctor: Sushmita will have to defer buying house but can reach all her other 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. Sushmita Mukherjee is 27 and invests in a clutch of equity funds for the downpayment of her house, her child’s education and her retirement. Here’s what the doctor advised her:

Goals

Investor’s existing portfolio

Portfolio check-up

• Early start will help reach goals if investments are continued regularly.
• May not be possible to save for house downpayment in three years. Consider deferring target date.
• Child education goal is ambitious but can be reached by 10% annual hike in SIPs.
• Retirement target can be met with combination of debt and equity funds.
• All investments for retirement should be increased by 5% every year.

Note from the doctor

• Funds are good but need to be monitored for performance.
• Review investments and rebalance at least once in a year.

II. Venkat Parthasarthy wants to create a corpus for his newborn nephew’s education, business and marriage. He wants to know the funds in which he should invest. Here’s what the doctor has advised:

Goals:

Investor’s existing portfolio

Portfolio check-up

• All three are long term goals so equity funds will be the best option.
• Suggested funds are a mix of large-, multiand mid-cap funds.
• Increasing SIP amount by 10% helps Monitor performance to see if portfolio on track.
• Review portfolio at least once a year. Change if any fund’s performance slips.
• 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.