Portfolio health check: score, flags and an action plan

Is there one "health" number?

No, and on purpose. The Portfolio page splits the question into three parts that each answer something specific:

1. Needs your attention, a strip of up to four cards under the headline figures.
2. Diversification score, a 0–100 ring on the Allocation tab with its working shown.
3. Your action plan, a numbered list on the Tax & actions tab.

All three need a free account and an imported CAS. Two parts also use a target allocation, which comes from the basket planner: submit it while signed in and your answers are saved for this page.

The hypothetical portfolio

The investor is invented; the funds and NAVs are real, as of 15 October 2026. Five Direct Growth funds are worth ₹21.60 lakh: UTI Nifty 50 Index Fund, ICICI Prudential Large Cap Fund, Kotak Flexi Cap Fund and HDFC Mid Cap Fund, each fed by a ₹5,000 monthly SIP since January 2021, plus HDFC Corporate Bond Fund. Equity is 88.5% of the money.

They also saved a plan: age 38, take-home ₹1,50,000 a month, expenses ₹90,000, ₹25 lakh already invested, 12 years, moderate risk. The planner's target for that is 65% equity, 30% debt, 5% gold.

Part 1: the diversification score

The card adds four components, each out of 25. A component with no data is dropped and the rest rescaled.

"Effective funds" counts holdings by value. Five funds of equal size count as five; one fund at 91% with nine at 1% counts as about 1.2. The total is 67, which the card words as Reasonably spread. The cut-offs are 80 for "Well spread", 60, 40 for "Concentrated in places", and anything lower is "Highly concentrated".

Below the bars the card lists red flags, each on a fixed line. They cover one fund house above 50% of the money, one sector above 30%, one stock above 8% and average overlap above 40%. Regular plans costing ₹1,000 a year or more, fewer than three funds, or a side-pocketed scheme also raise one. This portfolio raises none. The card calls itself "a heuristic, not advice".

Part 2: Needs your attention

The strip checks a short list of rules and shows the cards that apply, largest rupee stake first:

For this portfolio two cards appear. "Your funds overlap 26.4% on average — the same stocks, held through more than one fund" is marked "Worth a look". "Equity is 23.5pp above your target" is marked "Action needed", and adds that trimming ₹5.08L gets there faster but has a tax and exit-load bill attached. The duplication component also scores under 20, but the strip does not repeat it, since the overlap card already says it. Without a saved plan, only the overlap card would show.

The harvest card does not appear yet. In mid-October there are more than 120 days left before 31 March; it would join the strip from early December. Each card has a × that snoozes it for 30 days, and it returns if it still applies.

Part 3: your action plan

On the Tax & actions tab of Portfolio, the plan takes the drift, harvest and exit-load figures already on the page and orders them by what acting today costs. Its own caption says the cheapest step comes first, which is deliberately not the largest. For this portfolio:

1. Point new money at debt — ₹4.00L short of plan. Tagged "no tax · no load". The SIPs total ₹20.00K a month, so redirecting them closes the gap in about 20 instalments without selling anything.
2. Harvest ₹1.25L of long-term gain before 31 March. Tagged "no tax · saves ₹15.63K later". It names HDFC Mid Cap Fund and one other fund to sell and rebuy.
3. Trim up to ₹5.08L of equity from units that are free today. Tagged "no load · realizes tax". ₹18.59 lakh of the portfolio is outside every exit-load window.
4. Wait until 11 Nov 2026 before touching one fund. Both the mid-cap and flexi-cap funds have their last year of SIP units inside a 1% exit load. The next instalment of each comes free that day, and the step names one of them and the load it saves, about ₹600.

The list appears only when there are at least two steps. Its footnote says the figures are estimates from your own statement, not advice. It also notes that a sale settles in a few days, so a harvest and a rebuy do not happen at the same price.

What the health check does not do

• It does not know your other assets. EPF, deposits, property and stocks outside the CAS are invisible to it, so "88.5% equity" means 88.5% of these funds.
• It does not pick funds. No card names a fund to buy.
• The thresholds are rules of thumb. A 20% bank weight or a 26% overlap is not wrong in itself.

The ideas behind the steps are in portfolio rebalancing and the annual portfolio audit. Asset allocation by age offers a starting split if you have none, and gain harvesting across several years runs step 2 forward. None of this is investment advice.