How is your mutual fund portfolio doing? Not many investors are able to answer this. This new section will provide the answer. The portfolio doctors on our panel will assess the health of the mutual funds held by individuals, examine their suitability and, if required, recommend corrective measures. While doing so, they will consider the performance of the schemes, the risk profile of the investor as well as the financial goals of the individual. The investor will be given a detailed diagnosis of how his mutual fund portfolio is doing and whether he needs to make changes.
Mrugesh and Kinjal Shah are investing in equity funds for their 4-year-old daughter's education and their retirement. Here is what the doctor has to say:
PORTFOLIO CHECK UP
- They have other investments as well. Mutual funds only for child's goals and own retirement.
- Aggressive investors and willing to hold for the long term (over 10-12 years).
- Investing systematically for the past few years and want to increase investment.
- Though investing in a disciplined manner, have not fixed targets.
- Almost all schemes are good performers, so not many changes are recommended.
- Have chosen schemes on basis of past returns and star ratings.
- Good returns from mid-cap funds have made them more aggressive.
- Calculate how much you will need for each goal and invest accordingly.
- Don't lean too much on small-cap funds. They are more volatile. A multi-cap fund could be a better option.
- Review performance of funds once a year and take corrective action.
The Shahs want to invest ₹ 15,000 more every month, increasing investment from ₹ 25,000 to ₹ 40,000 per month. They want to invest in a small or midcap fund. They should add to their existing funds and buy 1-2 more.
PORTFOLIO DOCTOR ANSWERS QUERIES
I am 58 and have ₹ 40 lakh in my Provident Fund account. I want to invest it in a scheme that gives me a regular income. Please advise.
Jayant Pai CFP and Head of Marketing, PPFAS Mutual Fund says: You can invest ₹ 15 lakh in the 5-year Senior Citizens' Savings Scheme (SCSS) after you retire or quit under a voluntary retirement scheme. The SCSS account needs to be opened within a month of receiving the retirement benefits. At present, the scheme offers an interest of 8.5% per annum, payable quarterly. The remaining ₹ 25 lakh can be invested in a long-term fixed deposit of a highly rated bank. This will insulate you against any impending drop in interest rates. I suggest you either avoid company deposits-even though their rates are higher than bank fixed deposits-or invest in them only after seeking the advice of a competent investment adviser.
I am 25 and want to invest ₹ 1,500 per month in SBI Blue Chip Fund through SIPs. I want to invest for at least 20 years. Is this too long a time frame? Also, is this the right fund to invest in?
C.R. Chandrasekar CEO and Co-Founder, FUNDSINDIA.COM says: Twenty years is an excellent time frame to invest in equities and you have chosen a good fund to begin with. Just ensure two things: As you increase your investments, diversify into other fund categories, including debt funds. Also, get your funds reviewed annually to ensure that you stay with good funds.
The original article could be seen here.