MF portfolio doctor: Datti must restart mutual fund SIPs, not invest in lump sum

Ganapathi Datti is saving for his daughters’ education and marriage. Here’s what the mutual fund portfolio doctor has advised, based on the performance of the funds, the risk profile of this investor as well as her financial 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. Sandip Goyal is saving for his son’s education and retirement. Here’s what the doctor has advised:
Goals
231


Portfolio check-up
  • Has been investing in equity funds for the past 7-8 years.
  • Early start has helped build sizeable corpus.
  • Funds are good, but holds too many schemes in portfolio.
  • Small but regular increases in SIPs can help reach goals.
  • Retirement target very high. Scaled down to Rs 1 lakh per month.
  • House upgrade goal will require loan of Rs 1.05 crore. Should reconsider your plans.

Investment portfolio
232

Note from the doctor
  • Most funds in portfolio are well performing multi-cap schemes.
  • Choose a balanced allocation for NPS portfolio.
  • 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. Restart SIPs, don’t invest in lump sum
Ganapathi Datti is saving for his daughters’ education and marriage. Here’s what the doctor advised:


Goals
233

Portfolio check-up
  • Has been investing in equity funds for the past 2-3 years.
  • Was investing regularly, but stopped SIPs when markets turned volatile.
  • Wants to now invest Rs 6 lakh lump sum and SIPs of Rs 20,000.
  • Review fund portfolio at least once a year. Change if any fund’s performance slips.
  • 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)

If you want your portfolio examined, write to etwealth@timesgroup.com 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.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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