OUR expert Anil Rego reviews an investment portfolio sent by one of our readers. Rego makes suggestions and changes to cater to Ajay's financial goals.

Name: Ajay
Age: 36
Dependents: Wife and 2 kids (girls aged 5 and 3 years respectively)
Profession: Engineer working in the Gulf (NRI)
Monthly savings: Approximately Rs 100,000 (after all expenses including premium insurances)
Risk capacity: Medium to high

My insurance portfolio
1. Term Insurance for approximately Rs 1.4 crore
2. Endowment policy with LIC for 50,000 USD with double accident benefit
3. Whole life policy with LIC for Rs 6 lakh
4. Medical cover for me and my family is provided by my employer
5. Additional life (term) cover is provided by my employer for Rs 25 lakh

My investment portfolio

Avenue	Amount	Exposure (%)
Fixed Deposits	30,00,000	16
Capital Gain Bonds	19,00,000	10.1
Liquid Funds	18,00,000	9.6
Equity Mutual Funds	50,26,549	26.8
Debt Mutual Funds	12,99,568	6.9
Other Mutual Funds	740,591	3.9
Real Estate	50,00,000	26.6
Total	18,766,708

I don’t have any real estate exposure, except my current living house (which is my own house valued at Rs 50 lakh).

My financial goals

Financial Goal	Cost Today	Target Corpus	Target Year
1st Kid Education Corpus	15,00,000	2020	30,00,000
2nd Kid Education Corpus	15,00,000	2022	34,00,000
1st Kid Marriage/Seed Capital	10,00,000	2024	25,70,000
2nd Kid Marriage/Seed Capital	10,00,000	2026	29,00,000
Retirement Corpus*	-	2025	30,000,000

* Retirement corpus calculated based on monthly expenses of Rs 40,000 per month and Rs 100,000 per annum for Health Care
*Approximate target corpus is calculated based on 6 per cent inflation per annum

My questions
1. Is my portfolio and asset allocation structured to meet my financial goals?
2. How do I continue to book profits in order to maintain asset allocation while continuing with the SIPs?
3. Provide your opinion on choices of funds

Reply
There is substantial clarity on the financial goals that you intend to achieve; you have appropriately factored in the inflation rate as well. Your overall portfolio exposure is as shown below:

Overall observations
1. All your needs are necessarily arising over the long run, time horizon over 10 years
2. Overall risk profile is currently ‘low-moderate’
3. Appropriate life/medical cover is held
4. Exposure pattern
Debt-oriented instruments -- 43 per cent
Real estate -- 27 per cent
Equity -- 30 per cent (mutual funds only)

Next page: Suggestions to re-align your portfolio

Also read: Reader Raghu's MF portfolio reviewed!

Illustration: Vaibhav Shirke

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