Maintaining the health of your portfolio is important to ensure that your investments are not at risk. We will highlight the current risk in your portfolio so you can take action to mitigate them.
Your portfolio health can have 2 states depending on the investments you have.
In Good Shape At-risk
Know more about core and the different satellites :
We segregate your investments into Core, Slow-moving, and Fast Moving satellites based on fixed assets, Large-cap, small and mid- stocks. The idea is to have all allocation into your portfolio.
A strong foundation is always safer and vital to protect your investments in all economic conditions. This can be achieved with All-Weather Investing smallcase which diversifies your wealth in equity, gold, and fixed income with ETFs.
Slow-moving satellites: (Large-cap)
Slow-moving satellites are smallcases that mainly consist of large-cap stocks/ETFs. The objective of these portfolios is to provide good risk-adjusted returns and are well suited for long term wealth creation.
Fast Moving satellites : (Mid and Small-Caps)
Fast-moving satellites are smallcases that mostly consist of mid-cap & small-cap stocks. While they help you take exposure to different themes, ideas, and sectors of your choice, these satellites can generate high returns but are volatile in nature.
We categorize your investments based on the above metrics and your portfolio health is safe when all the satellites are in place. Based on your investments you will be in any of the below stages.
Your Investments are empty :
If you are about to start your investment, it’s time for you to build a portfolio with a strong and stable foundation. You can start your portfolio by having a Core first, then strengthen it by having Slow moving, and Fast-moving smallcases. Once you’ve tapped on “Build A stable foundation”, you can invest in the All weather Investing portfolio directly. You can also choose to narrow down on the smallcases if you wish to take more risks.
Core Missing / Core Lagging:
A core portfolio should always be the foundation of your investments since it’s built with equities, gold, and fixed income. This tends to make the core of your portfolio stay strong and protected during market crashes.
Your portfolio will be at risk if you don’t have a core smallcase or if you have less investments towards All weather Investing as compared to other smallcases in your portfolio. To mitigate this risk you can invest in All Weather Investing smallcase.
If your core is lagging, you will be prompted to add a specific amount into All Weather Investing to make your investments in a good shape.
Core Missing Core Lagging
Slow-moving missing / Lagging:
Slow-moving satellites not only help you take exposure to large-cap focused strategies but also aim to increase the return potential of the investment without increasing risk. You can add a slow-moving satellite to your portfolio to mitigate this risk.
Similar to the core portfolio, it’s important to ensure the risk is diversified between your core and slow-moving satellites. Your portfolio may be at risk if the value of your slow-moving satellite smallcases is less than 30% of your total portfolio value.
To mitigate this risk, you can invest more in your slow-moving satellites. If you hold 1 or more slow-moving satellite smallcases, you can choose which one you want to invest more into.
In the below example, you would need to invest at least Rs. 10000 in any of the slow-moving satellite smallcases.
Similarly, the same follows for Fast-moving satellites (smallcases with more exposure to Mid and small-cap stocks) as well.
Once you have the correct allocation in your investments your portfolios will be in good shape:
Suggestions for investing in smallcases (if any), are only for the purposes of ensuring proper diversification, on a best effort basis. These suggestions are derived from a fixed model without any reference to the investor's risk profile, financial needs and goals.
This should not be construed as investment advice or as a solicitation to invest in the smallcases. The investor is advised to consult his / her advisor before arriving at any investment decision.