MF Portfolio Doctor: Why Singhal should avoid gold funds when saving for daughter's marriage

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. Aman Singhal, 42, is investing in a mix of equity funds, gold and Post Office schemes for his daughter’s education and marriage, and his retirement. Here’s what the doctor has advised him:


Goals:

Investor’s existing portfolio

Portfolio check-up

• Investing in mutual fund SIPs for past few years.
• Holds too many schemes. Advised to consolidate portfolio to avoid duplication of funds.
• Goals are ambitious but can be met with small incremental 10% growth in SIP every year.
• Avoid gold funds. Their returns will be substantially less than equity funds.

Note from the doctor

• Goals are long term, so equity funds are most suitable.
• As the investor is self-employed, PPF and Sukanya scheme are necessary for portfolio stability.
• Review investments and rebalance at least once a year.
• Reduce risk by shifting to debt schemes when the goal is near.

II. Priya Nandhini, 38, is investing in mutual funds for her son’s education. Here’s what the doctor has advised:

Goals:

Investor’s existing portfolio

Portfolio check-up

• Started investments for child’s education at the right time.
• Goal may appear stiff, but disciplined systematic investments can help achieve it.
• Goal is long term, so equity funds are the most suitable investment option.

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.