MF portfolio doctor: Bhadra can use current stock market rally to exit underperforming mutual funds

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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.

CASE I: Arun Bhadra is investing for his daughter’s goals and retirement. Here’s what the doctor advised

Portfolio check-up

  • Started investing in equity funds 10-12 years ago.
  • Long-term SIPs, large investible surplus have amassed decent corpus.
  • All goals can be easily reached. Has enough for additional goals.
  • Investor has not been monitoring the performance of funds.
  • Many funds are chronic underperformers.

Note from the doctor

  • If monitoring funds is a problem, go for passive index funds.
  • High equity exposure in portfolio, so opt for debt fund in NPS.
  • Buy term insurance cover of Rs 2 crore for yourself.
  • Rebalance at least once in a year. Reduce risk when goal is near so you don’t miss target.

CASE II: Krutika Patil is saving to buy a house, her marriage and retirement. Here’s what the doctor advised

Portfolio check-up

  • Investing in equity funds for past two years.
  • Funds are good, but goals are too near. More investments needed to reach them.
  • Start shifting systematically from equity funds to debt schemes.
  • Opt for maximum equity exposure in NPS account.
  • 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

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