MF portfolio doctor: Why Nath must closely monitor thematic and sector mutual funds in her portfolio

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.

I: Sonal Nath is saving for a house, child’s goals and retirement. Here’s what the doctor advised:
Goals
Investor's existing portfolio

Portfolio check-up
Note from the doctor

• Holds too many thematic and foreign focused funds.
• Avoid fixed deposits as interest is fully taxable. Use debt funds.
• Opt for maximum allocation to equities in NPS.
• Review investments and rebalance at least once in a year.
• Reduce risk when goal is near so that you don’t miss the target.

II: Dump underperforming schemes
Ritesh Agrawal is saving for his children’s education and his retirement. Here’s the doctor’s advice:
Goals
Investor's existing portfolio
Portfolio check-up

• Investing in equity funds for past five years.
• Early start and regular investing have helped amass sizeable corpus.
• Present investments are fine but increasing SIPs every year will reach goals before time.
• Review mutual 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.

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.