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METHODOLOGY
SEP’20
MODEL PORTFOLIO
WEALTH CREATION MF ONLY
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Introduction to Model PortfoliosWith Yadnya’s Model portfolios, what we are offering is making complicated investing
simple.
These Model Portfolios use same asset allocation philosophy that we use for some of the
big investors and its pillars are our research-based products –
o Mutual Fund Subscription
o Financial planning product
The idea is to utilize quantitative and qualitative factors observed based on our extensive
research for suggesting model portfolios that make sense for individual investors like you.
Fund Selection ApproachMutual Funds help in easy diversification and tapping on professional fund management
and research expertise via an easily accessible channel. It is truly an invest and forget
type of product unless and until there is a significant change in management or a market
event-based trigger.
Gold & International Funds (Mostly US based) are less volatile in nature than Indian
Equity, help as a cushion from asset allocation perspective and by investing in a different
asset class, we are diversifying our portfolio risk. These funds and asset classes are also
very good hedge against Indian Stock market and have very low correlation.
ETFs and Index funds are passive investing funds that are linked to an underlying
benchmark index and provide a low-cost alternative for taking exposures in the financial
market.
We have utilized our proprietary fund selection methodology - MFYadnya.In for shortlisting
and adding equity mutual funds and ETF/index funds in model portfolios.
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Wealth Creation Portfolio
Investment ObjectiveThe aim is to generate good growth with Equity based portfolio with reduced downside
risk. We have used some good risk hedging mechanism by creating a multi-cap, multi-
asset growth-oriented portfolio.
StrategyWealth Creation could be an ideal investment solution for investors seeking long-term
wealth generation. Strategy is to Buy and Hold investments with a time horizon of 8
years+
Rationale for this PortfolioWealth Creation Goal comes after your all major life goals are met or being met with
current monthly investments. Wealth Creation goal is for that extra savings which has
capability to improve your lifestyle in future and gives you cushion over your major life
goals like Retirement, Children Education, Marriage and Emergency.
Most of the time with the money you want to invest in Wealth Creation goal, you can take
some extra risk than your other major life goals. Investors mostly have higher propensity
to bear losses in short term on this goal.
Considering this and assuming all your major life goals are achievable, we have not taken
any Debt allocation in this goal. To hedge some Indian equity risk, we have taken
allocation to Gold & International Stocks too.
We have included three modes of investment vehicles in this model portfolio – Large, Mid
& Small Cap Mutual Funds, Gold and International Mutual Funds. For meeting the
investment objective of a growth oriented multi-cap, multi-asset portfolio, looking at the
long-term expected returns and risk levels of each asset class based on our long-term
view of Indian economy, Gold markets & Global financial markets, we suggest this
strategic allocation of 80% in Indian Equity Mutual Funds, 10% in Gold and 10% in
International Fund.
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Methodology
1 Strategic AssetAllocation
Indian Equity Mutual Funds, Gold & International Equity Funds
2 Selection Universe
Indian Funds covered in MFYadnya.inAll Gold & International Funds
3 Fund Screening
Performance Consistency, MFYadnya.in star Rating, Risk-Return Ratios, AUM
4 Mutual Funds Allocation
Allocation based on risk profile and market cap
5 Portfolio Rebalancing
6 months to bring back asset class weights as per SAA
6 Portfolio Monitoring
Monthly for market, fund related events
Strategic Allocation by Asset Class
Indian Equity Mutual Funds, 80%
Gold, 10%
International Equity Fund, 10%
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Is this model portfolio for you?This Wealth Creation portfolio is appropriate for an investor whose all major life goals are
already achieved or are on target to be achieved with regular monthly investments. This is
planning for that extra savings (monthly or lumpsum) with a medium to high risk tolerance
and a time horizon longer than eight years. These investors are willing to accept periods
of high market volatility in exchange for the possibility of receiving returns that outpace
inflation by a significant margin. We also tried to reduce the downside risk by hedging the
portfolio with Gold & International Funds.
This portfolio might get an average annualized return of 12-15%. Its best yearly gain
might be 20-25% and its biggest decline in a year may range from 15-20%.
Time Horizon – Min. 8 years
Benchmark – BSE 500 TRI
Rebalancing – 6 Monthly
Important DatesLaunch Date – May 30th, 2020
Last reviewed – May 30th, 2020
Next Rebalancing on – December 1st, 2020
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Wealth Creation Model Portfolio Cumulative Performance
PerformanceThis chart shows the portfolio’s cumulative performance starting from Jan 2015 until 31st
August 2020. The Model Portfolio is compared against BSE500’s cumulative returns.
180.5
150.2
80
100
120
140
160
180
Dec 14
Feb 1
5
Apr 15
Jun 1
5
Aug 15
Oct 15
Dec 15
Feb 1
6
Apr 16
Jun 1
6
Aug 16
Oct 16
Dec 16
Feb 1
7
Apr 17
Jun 1
7
Aug 17
Oct 17
Dec 17
Feb 1
8
Apr 18
Jun 1
8
Aug 18
Oct 18
Dec 18
Feb 1
9
Apr 19
Jun 1
9
Aug 19
Oct 19
Dec 19
Feb 2
0
Apr 20
Jun 2
0
Aug 20
Wealth Creation Port folio BSE 500 TRI Index
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Disclaimer: The information on this site is provided for reference purposes only and
should not be misconstrued as investment advice. Under no circumstances does this
information represent a recommendation to buy or sell stocks or MF. All these portfolios
are created based on our expert’s experience in the market. These Model Portfolio are
prepared by SEBI Registered RIA.
Wealth Creation Portfolio Last 1 Year Monthly Returns
The chart below shows last one year’s monthly performance of the Wealth Creation
Model Portfolio against the monthly returns of benchmark BSE500.
-4.5%
1.0%
5.0%
2.9%1.2% 0.8%
2.3%
-4.0%
-18.2%
9.9%
-2.0%
6.8%6.0%
4.50%
-6.5%
0.0%
4.1% 3.5%1.7% 1.2%
0.0%
-7.0%
-26.5%
18.7%
-2.3%
8.3%7.1%
3.90%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20
Wealth Creation Port folio BSE 500 TRI Index