Investment Portfolio: Portfolio Doctor MF: Ajbani needs to review his investment portfolio and weed out underperformers


Few investors know if they have invested in the right funds and if their fund portfolio is on the right track. The Portfolio Doctor assesses the health of the fund portfolio, reviews the schemes and their suitability for the objectives and, if necessary, recommends corrective measures.

The advice given is based on the performance of the funds, the investor’s risk profile and their financial objectives.

CASE I: Anup Ajbani is saving for her children’s goals and her retirement. This is what the doctor advised him.

Goals

Pg23-2

Portfolio balance sheet

  • I started investing in equity funds to save tax 10-12 years ago.
  • Long-term conservation has made it possible to constitute an important corpus.
  • The goals are ambitious but can be achieved by increasing the SIPs each year.
  • The retirement target of Rs 40,000 per month was too low. Revised at Rs 50,000 per month.

Doctor’s Note

  • Wants to increase current SIPs from Rs 8,000 to Rs 20,000 per month.
  • Buy a term insurance plan of Rs 1.5 crore to protect your goals.
  • Review investments and rebalance them at least once a year.
  • Reduce the risk when the target is close so you don’t miss the target.

CASE II: Girish Chander is saving to buy a house and his children’s education. This is what the doctor advised him.

Goals

Pg23-3
Pg23-4

Portfolio balance sheet

  • Invest in a combination of equity, equity and fixed income funds to achieve goals.
  • Investments for the house will reach Rs 34 lakh in two years. Take the loan for the balance.
  • The child’s education goal is on track. Pursue SIPs in existing funds.
  • Review the mutual fund portfolio at least once a year. Change if a fund’s performance slips.
  • Reduce the risk when the target is close so you don’t miss the target.

Assumptions used in calculations

Inflation

  • Tuition fees: 10%
  • For all other objectives: 7%

Return

  • Equity funds: 12%
  • Debt options: 8%

Portfolios analyzed by Raj Khosla, Managing Director and Founder, MyMoneyMantra

Write to us for help

If you would like your portfolio reviewed, write to [email protected] with “Portfolio Doctor” in the subject. Mention the following information:

  • Names of funds you hold.
  • Current value of the investment.
  • If you have SIPs running in any of them.
  • The financial objectives for which you have invested.
  • How much you need for each financial goal.
  • How far away is each objective

Previous Darcy Ungaro: Property, house prices – should your home be an investment vehicle?
Next Some spring cleaning tips for your investment portfolio