Investment

MF portfolio doctor: Shukla should not underestimate inflation and retirement needs

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: Gaurav Shukla is saving for his child’s goals and retirement. Here’s what the doctor has advised.

Goals

shukla-goals

Investor’s portfolio

shukla-portfolio

Portfolio check-up

  • Investing for past 4-5 years. Early start has built sizeable corpus.
  • Holds mostly mid-cap and small-cap funds. Only one large cap fund in portfolio.
  • Target of Rs 30 lakh for marriage after 28 years means Rs 5 lakh at today’s prices.
  • Retirement goal also low at Rs 50,000. Raise to Rs 1 lakh a month.
  • Minor 5% annual increase in SIP will help achieve all goals.

Note from the doctor

  • Invest in mix of largecap, mid-cap and small-cap funds.
  • Don’t get tempted to invest in today’s winners.
  • Review investments and rebalance at least once in a year.
  • Reduce risk when goal is near so that you don’t miss the target.

Case II: Saurabh Arora is saving for his daughter’s goals and retirement. Here’s what the doctor advised. Goals

arora-goals

Investor’s portfolio

arora-portfolio

Portfolio check-up

  • Investing in equity funds for the past 7-8 years, but withdrew twice for needs.
  • Seems to be guided by distributor’s advice on fund choices. All schemes done poorly.
  • Move SIPs and corpus to better performing funds.
  • Modest 10% hike in SIPs every year can help reach all goals.
  • Review mutual fund portfolio at least once a year. Change if 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.

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