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“In the short run, the market is a voting machine, but in the long run it is a weighing machine”

“In the short run, the market is a voting machine, but in the long run it is a weighing machine” -Benjamin Graham. Global Asset Allocation Dynamics Vineet Bhatnagar MD & CEO PhillipCapital (India) Pvt. Ltd. Why Global Asset Allocation ?. Diversified Asset class

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“In the short run, the market is a voting machine, but in the long run it is a weighing machine”

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  1. “In the short run, the market is a voting machine, but in the long run it is a weighing machine” -Benjamin Graham

  2. Global Asset Allocation DynamicsVineet Bhatnagar MD & CEO PhillipCapital (India) Pvt. Ltd

  3. Why Global Asset Allocation ? • Diversified Asset class • Market Environment • Risk Perception • Expected Risks • Unexpected Risks • Better Return

  4. Fundamentals of Asset Allocation • Fulfill Investors needs • Minimizes Risk through Diversification • Approachable / Permissible asset classes • Charter Long-term macroeconomic and market views

  5. Why Diversification ? • Reduce Portfolio's sensitivity to market swings • Reduces Risk • Maximizes Return • Imperfectly correlated assets

  6. Allocation Alternatives • Investment Funds – Investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group having common goals, risk, fees and other factors. • Advice Based Funds • Portfolio Management - The science of analyzing the strengths, weaknesses, opportunities and threats for performing wide range of activities related to the one’s portfolio for maximizing the return at a given risk.

  7. Asset Allocation Strategies • Strategic Asset Allocation- A portfolio strategy that involves setting target allocations for various asset classes, and periodically rebalancing the portfolio back to the original allocations when they deviate significantly from the initial settings due to differing returns from various assets. • Tactical Asset Allocation- An active management portfolio strategy that rebalances the percentage of assets held in various categories in order to take advantage of market pricing anomalies or strong market sectors. • Dynamic Asset Allocation- A portfolio management strategy that involves rebalancing a portfolio so as to bring the asset mix back to its long-term target.

  8. Avenues for Global Asset Allocation • Equities • Fixed Income • Pension Fund • Insurance • Mutual Fund • Hedge Fund • Real Estate • Commodities • Currency • Cash

  9. Asset Classes • Cash and Short Maturity Bonds (<1-3 Yrs) – Risk Free Asset • Developed Govt. Bonds ( 3 yrs & above, AA- or better) • Investment Grade Bonds ( >1 yrs , BBB- to A+) • High Yield and Emerging Markets Bonds ( Companies rating BB+ or lower ) • Developed Markets Equities • Emerging Markets Equities • Commodities • Real Estate • Alternative Trading Strategies (ATS) Source : Barclays

  10. RBI Regulation on GAA • Liberalised Remittance Scheme, allowed to freely remit up to USD 125,000 per financial year. • Under the Scheme, resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. • LRS can be used to acquire both listed and unlisted shares of an overseas company. • A resident individual can invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc. under this Scheme. Source : RBI (Updated on July 2014)

  11. Thank You PhillipCapital (India) Pvt. Ltd. No. 1, 18th Floor, Urmi Estate,95 Ganpatrao Kadam Marg, Lower Parel West, Mumbai 400013, Maharashtra,IndiaTel No: + 91 22 24831919 & 23002999

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