MF portfolio doctor: Magar should exit underperforming mutual fund schemes to achieve money goals

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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.

1. Naveen Agarkar is saving for his kids’ goals and his retirement. Here’s what the doctor has advised:

Goals

Portfolio check-up

  • Invests in a mix of small-cap, mid-cap and large-cap funds.
  • Has chosen good schemes with minimum overlap.
  • Goals are ambitious but 10% hike in SIPs will help achieve them.
  • Investing too much in PPF and PF. Reduce contributions.
  • Instead, contributions to NPS can be increased.

Investment portfolio

232


Note from the doctor

  • Take term life insurance of Rs 2 crore.
  • Establish an emergency fund to tide over unforeseen expenses.
  • Review investments and rebalance at least once in a year.
  • Reduce risk when goal is near so that you don’t miss the target.

2. Dump laggards and switch to winners
Neha Magar is investing for her son’s education and marriage. Here’s what the doctor has advised:

Goals

233


Portfolio check-up

  • Most of the funds in portfolio are underperforming.
  • Switch to better performing schemes with more stable returns.
  • Goal value has not been mentioned. We have assumed Rs 15 lakh for each goal.
  • Review mutual fund portfolio at least once a year. Change if a fund’s performance starts slipping.
  • Reduce risk when goal is near so that you don’t miss the target.

Investment portfolio

234



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 [email protected] with “Portfolio Doctor” as the subject. Mention the following information:
Names of the fund 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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