Don’t Get Swept Away By Sensex Euphoria

This financial year began with the Sensex inching up to the 30,000 mark and then holding. Investors breathed a sigh of relief and patted themselves on the back for “believing in the market”. Since then the Sensex has bullishly ploughed through, reaching new highs in spite of trepidation about GST and downward revisions to growth numbers. But few investors, and even fewer advisors, have been looking at the bigger picture- equity as a share of total assets.

If you haven’t already rebalanced your portfolio, the time to act is now. Take decisions based on data and analysis rather than emotion. Three insights that your Asset Vantage software provides:

  1. Asset Allocation Report (Analytics > Asset Allocation > Grouping by Asset-class)

Get a complete picture of your allocation to all asset classes, across single or consolidated portfolios. Track variance in the allocation to asset classes, recognize opportunities to rebalance your portfolio; shift money from equity to fixed income, commodities, real estate, etcetera depending on your desired asset allocation mix.

  1. Advisor-wise IRR Performance (Analytics > Portfolio Performance > Grouping by Advisor)

The next logical question is: which part of your equity portfolio should you divest? Use the Portfolio Performance report to compare IRR performance of advisors and stocks. To balance risk adjusted returns you might want to weed out advisors, stocks or sectors that have underperformed compared to each other or to their respective benchmarks. Consider balancing exposure to risk; rethink stocks or sectors to which you are over-allocated.

Simultaneously you can manage tax liability by using the Gains Report to view lot-wise unrealized gains, categorized into short and long term. Lots with unrealized short term capital loss can be sold to offset any short term capital gains liability that arises from sale of equity.

  1. Returns by asset-class (Analytics > Portfolio Performance > Grouping by Asset-class)

Compare performance of multiple asset classes, using the equitable and comparable measure of IRR. View each investment against its respective benchmark, by adding a column for benchmark in the drop down menu. These analytics provide the fodder to enable you to revisit desired asset allocation and choose multiple asset classes in which to invest, while rebalancing your portfolio.

It may be tempting to stay heavily invested in equity, but statistics prove that regular rebalancing improves returns. With Asset Vantage you can access past, current or target asset allocation and returns anytime and anywhere. Use the information at your fingertips to make well informed decisions and further your wealth.

No Comments

Post A Comment