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Regular Income Model Portfolio | Model Portfolio in India

Regular Income Model Portfolio | Model Portfolio in India (Methodology Document)

Published on 01 June 2021 .Views 6184 .Comments 9
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Introduction to Model Portfolios

With Yadnya’s Model portfolios, what we are offering is making complicated investing simple.

These Model Portfolios use the same asset allocation philosophy that we use for some of the big investors and its pillars are our research-

based products –

Mutual Fund Subscription

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 Approach

Mutual 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.

Debt Funds are much safer & less volatile than Equity. Arbitrage Funds are a good substitute of Liquid funds for investors in the 30% tax bracket as they are tax efficient option for short-term investing. Hybrid Funds reduce our overall downside risk during a bear market and are a good option for conservative investors.

ETFs and Index funds are passive investment 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, hybrid & Debt mutual funds, and ETF/index funds in model portfolios.

Regular Income Portfolio:

Investment Objective

The aim is to generate long term regular income with the current corpus with tax efficient & above inflation returns

Strategy

Strategy is to invest in Debt for short term income and gradually take some Equity and other market driven allocation for medium & long-term incomeRational for this Portfolio

You’ve saved for retirement for years. Now that retirement is approaching, how can you create a regular stream of income from your savings to help pay your bills?

Or you have inherited a large sum of money and want to invest in such a way so that you can get regular income for long term. Investors do not want to take much risk with these investments and look for regular income for as long as possible. Primary objective is to get tax efficient returns and some higher than inflation returns to avoid the loss of capital.

We have assumed that you already have a separate Emergency Corpus apart from this investment and would withdraw an optimum inflation adjusted monthly income so that your investment corpus can sustain for long term. Example: An approx. Rs. 50 Lakhs corpus can give you 7% inflation adjusted Rs. 21,000/month income (increasing Rs. 21,000 income by 7% every year) for 20 years with this portfolio.

We have included multiple modes of investment vehicles in this model portfolio – Fixed Deposits/Liquid Funds/Arbitrage Funds, Debt Funds, Hybrid Funds, Large Cap Funds and Gold Funds. For meeting the investment objective of regular income with tax efficient & above average inflation returns with multi-asset portfolio, looking at their long-term expected returns and risk levels of each asset class based on our long-term view of Indian economy, we suggest the strategic allocation of 50% in Liquid/Debt, 45% in Equity & 5% in Gold.

Methodology

 Strategic Allocation by Asset Class

 

 Is this Model Portfolio for you?

This long term Regular Income with Growth portfolio is appropriate for a moderate risk investor who wants a long-term regular income. It is assumed that the investors have a separate Emergency Fund apart from the investment in this portfolio. They are wary of capital loss but are willing to accept periods of some market volatility in exchange for the possibility of receiving returns that outpace. We also tried to reduce the risk by hedging the portfolio with some Gold investment.

This portfolio might get an average annualized return of 8-9%. Its best yearly gain might be 12-15% and its biggest decline in a year may range from -0 to -5%.

Time Horizon – Min. 10 years

Benchmark – Yadnya 50-50 TRI

Rebalancing – 6 Monthly

Important Dates

Launch Date – May 30th, 2020

Last Market Driven Rebalancing on - May 11th, 2022
Last Bi-Annual Rebalancing on – June 16th, 2022

Next Bi-Annual Rebalancing on – December 15th, 2022

Performance 


As on 31st Jul 2022

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.

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