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MF portfolio doctor: Why Jauharis needs to reduce financial targets to reach them

The mutual fund portfolio doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regards to the money goals. The mutual fund portfolio doctor recommends corrective measures that you should take.

Last Updated: Feb 24, 2020, 06.30 AM IST
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Investors should review the investments and rebalance the portfolio at least once in a year.
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: Anurag Jauhari and his wife are investing for multiple goals. Here’s what the doctor advised them.

Jauhari goals

Investor’s existing portfolio

Portfolio check-up
  • Invests in mutual funds, insurance, small savings and NPS.
  • Holds too many funds. Needs to consolidate. Insurance dragging down performance.
  • Rs 50 lakh target for all four child goals is not logical. Cut to Rs 25 lakh; adjusted for inflation.
  • All SIPs will have to be hiked by 10% every year to reach goals.
  • Deploy cash in bank in liquid scheme or short-term debt fund to earn better returns.
Note from the doctor
  • Don’t buy insurance as investment. Returns are too low.
  • 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: Deepak Yadav is saving for his child’s education and his retirement. Here’s what the doctor has advised him.


Investor’s existing portfolio

Portfolio check-up
  • Started investing in equity funds last year.
  • Goals are ambitious and will require regular hikes in SIPs.
  • Retirement target of Rs 2 crore after 20 years is too modest. Will yield Rs 25,000 a month (current value).
  • Has not mentioned PF, small savings, NPS. Could obviate need for more investments.
  • Review investments and rebalance at least once in a year

Assumptions used in the calculations
  • Education expenses: 10%
  • For all other goals: 7%
  • 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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(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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