Mutual Fund SIPs | MF Portfolio Physician: Joshi’s Ambitious Financial Goals Require Annual Increase in Mutual Fund SIPs

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.

Ritesh Joshi saves for his children’s goals and retirement. Here is what the doctor advised him:

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PORTFOLIO CHECK-UP

  • Invest in equity and hybrid funds over the past 4-5 years.
  • Targets a little high.
  • SIPs should be increased by 10% per year.
  • Consider reducing some goals if increasing SIPs is not possible.
  • Avoid the FDs. Debt funds are better.
  • Go for maximum equity exposure in the NPS.

Doctor’s Note

  • Avoid investing in too many funds. Only 5-6 funds are enough.
  • Review investments regularly and weed out underperformers.
  • Rebalance the portfolio at least once a year to control risk.
  • Reduce the risk when the target is close so you don’t miss the target.

Monitor and eliminate underperformers

Jitin Dubey invests in equity funds for his son’s education and marriage. Here is what the doctor advised:

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PORTFOLIO CHECK-UP

  • Most of the funds in the portfolio are underperforming.
  • Switch to higher performing diets with more stable returns.
  • Goal value not mentioned. Assumed at Rs 15 lakh for each goal.
  • 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

Dolores W. Simon