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Smart investing Series - Part 2 ( Asset Allocation)
- 1. Welcome to Part 2 SMART INVESTMENT SERIES
- 2. Session Host Infinity Finserv (P) Ltd 212 Saran Chambers 2 , Park Road, Lucknow - 226001 Ph # 9307218766 Website : https://infirupee.com Facebook : FB/infirupeee Youtube : Infinity Finserv
- 3. Recap
- 4. What we do ? • Wealth Coaching • Behavioral Training for investors • Motivator and hand holder • Book Keeping & Accounting with full Safety
- 5. What is a price of an Asset ? “ !कसी भी चीज़ का दो भाव होता है – एक जो उसक3 असल6 क़3मत है और दूसरा वो जो नज़=रए से बनता है” “ जब नज़=रया अलग और अनेक होते हD तो भाव मE Fयादा उथल पुथल होती है – जब नज़=रया सभी का एक तरफ़ होता है तो भाव मE कम उथल पुथल होती है” By : Infirupee Academy
- 6. What makes the difference in your wealth ? 1. The step you take according to your नज़#रया and 2. How do you control your emotions and behavior on the basis of other peoples नज़#रया
- 7. The required action • One SIP in each ( strech yourself for few years) • Tech Fund • International NASDAQ fund • Infrastructure Fund • Small & Midcap Fund • Buy Stocks or MF units in relevant Equity schemes, regularly , whatever be your contribution….keep adding
- 8. Part 2 of the session The stable path
- 9. If you want to grow your wealth at an average speed – free of all nuances ! • Go for Dynamic Asset Allocation • FOF , or • Regular
- 10. What is Asset Allocation ? Distribution of funds in different Asset Class – Debt, Equity, Gold, Dollor etc
- 12. Why Asset Allocation ? Its an old age theory of investing – Don’t put all eggs in one basket..
- 13. So what is so big about it ?
- 14. Asset Allocation – Type 1 • Just divide in multiple Assets and generate the average Returns
- 16. Normal Asset Allocation ( Sample) Indian Equity International Equity Gold Debt Returns Weightage 25% 25% 25% 25% 1 Yr ROI 15% 12% 5% 6% 10% 1 Yr ROI 2% 8% 12% 6% 7% 2 Yr ROI -5% 2% 12% 6% 4% 3 Yr ROI 15% 12% -5% 6% 7%
- 17. Asset Allocation – Type 2 • Just divide in multiple Assets and generate the average Returns • Keep changing the Investment Weightage from time to time
- 19. What is important in Dynamic Asset Allocation? • You need to understand all Assets and its correlations on both macro and micro basis • You need to be quick in terms of implementing the change • You need to be above emotions and stick to your rules of allocations • Your allocation should be cost effective • Capital Protection should be your first priority and then the returns
- 20. What is important in Dynamic Asset Allocation? • You need to understand all Assets and its correlations on both macro and micro basis • You need to be quick in terms of implementing the change • You need to be above emotions and stick to your rules of allocations • Your allocation should be cost effective • Capital Protection should be your first priority and then the returns
- 22. Corelations • Bonds don’t show any strong relationships, hence, uncorrelated and you get diversification benefits from adding bonds to your portfolio. Looking at the 10-year rolling correlation, we can see that bonds have been uncorrelated to equity over time as well. • Gold is uncorrelated to all except the US dollar. You get diversification benefits from adding gold to your portfolio. Gold has a negative correlation to the US dollar, as we look at gold in terms of US dollar, a weaker dollar means a higher US$/oz t price. • The US dollar has mostly negative relationships. The US dollar should have a negative relationship to oil, as oil is traded in US$, the correlation shows signs of that. There’s a negative relationship between the US dollar and world equity. Dollar down, stocks up?
- 24. What is important in Dynamic Asset Allocation? • You need to understand all Assets and its correlations on both macro and micro basis • You need to be quick in terms of implementing the change • You need to be above emotions and stick to your rules of allocations • Your allocation should be cost effective • Capital Protection should be your first priority and then the returns
- 25. Managing & Implementing the Asset Allocation • Challenge is to transact • Challenge is to manage Tax • Challenge is to understand when to take action ?
- 26. Mutual Fund presents Asset Allocation Plans • Regular or Fixed Asset Allocation Plans • 2 Assets : Debt & Equity • 3 Assets : Debt, Equity & Gold • 4 Assets : Debt , Equity , Gold & International Equity • Dynamic Asset Allocation Plan • Taxation is kept in mind ( Balanced Advantage Funds) • They keep Equity Plus arbitrage Plus Derivatives at 65% always to keep it under Equity Taxation • They keep Changing the Debt - Equity ratio based upon their inhouse formulae • Taxation is not the key consideration ( Dynamic Asset Allocation Funds) • They do not invest in arbitrage or Derivatives to maintain the Equity weightage
- 28. From where does they get Assets ? External Internal Such Funds are called as FOF ( Fund of Funds)
- 29. Example of Dynamic Asset Allocation Funds – External Assets • See the Table
- 30. Example of Dynamic Asset Allocation Funds – Internal Assets • See the Table
- 31. New launches under the Asset Allocation category • HAF : HDFC Asset Allocator Fund – Fund of Funds • Opening 16th April 2021 • Closing 30th April 2021
- 33. How they will allocate ? • Using an in-house model that incorporates various valuation parameters such as the Price-Equity (PE) and Price-to-Book ratios, allocation to equity, debt and gold would be decided. It will invest 40-80 percent in equity, 10-50 percent in debt and 10- 30 percent in gold.
- 34. Have you checked your overall Asset Allocation ? IS IT DYNAMIC ? IS IT ADEQUATE ?
- 36. Thanks