As retirement gets closer, people need to balance many financial needs together — keeping money safe for family goals, growing savings to beat inflation, earning regular income, and avoiding too many unnecessary investments. Investors with large amounts in FDs, PF, and multiple mutual funds should regularly review their portfolios to make sure their investments match their future goals and changing market conditions.
A 55-year-old individual investor reached out to ETMutualFunds and sought advice on restructuring a portfolio worth nearly Rs 2.75 crore spread across mutual funds, provident fund (PF), fixed deposits (FDs) and direct equities. The investor also highlighted near-term goals such as daughter’s marriage within two years and son’s marriage over the next eight years.
Out of this Rs 2.75 crore, nearly Rs 70 lakh is invested in mutual funds, Rs 1 crore each in provident fund and fixed deposits and Rs 5 lakh in direct equity. From Rs 70 lakh invested in mutual funds, the investor has nearly Rs 54.60 lakh in equity (78%), Rs 11.90 lakh in debt (17%), Rs 2.10 lakh in gold (3%) and Rs 70,000 in global equity (1%). He has Rs 50,000 monthly expenses and no major outstanding liabilities.
Market expert Vishal Dhawan, Founder & CEO, Plan Ahead Wealth Advisors analysed the portfolio and told ETMutualFunds that the investor has a strong capital base of Rs 2.75 crore in liquid/investable assets and relatively low monthly overheads. However, the current mutual fund structure is fragmented across nine different categories, leading to style drift and overlapping holdings.
Dhawan said that while the mutual fund allocation appears equity-heavy, the overall portfolio is actually conservative because of the large allocation towards PF and fixed deposits. The expert estimated that total equity exposure currently stands at roughly 22% of the overall portfolio, while debt-related investments account for nearly 77%.
