MF portfolio doctor: Kumar should reduce number of funds, allocation to gold

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: Shilpa Kumar invests for her son’s goals and her retirement. Here’s what the doctor advised her.

Portfolio check-up

• Investing in equity funds for past 4-5 years.
• Has built sizeable corpus. All goals reachable.
• Portfolio has mid and small-cap bias. Be ready for volatility.
• Has too many funds. Needs to cut down to streamline portfolio.
• Too much exposure to gold. Needs to be pared.

Note from the doctor

• Don’t buy too many funds. Just 3-4 funds are enough.
• Too much lying in tax-inefficient fixed deposits.
• Consider opening NPS account to save for retirement as also cut tax.
• 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: Arjun Shankar is targeting a retirement corpus of Rs 15 crore in 29 years. Here’s what the doctor has advised him.

Portfolio-check-up

Invest and Earn on ET Money - Get up to 9.5% p.a. returns

• Investing in equity funds for past 4-5 years.
• Early start has made it easy to reach targeted goal.
• Some underperforming funds need to be replaced.
• 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.