Wealth Creation MF Only | Model Portfolio (Methodology Document)

Introduction to Model Portfolios

With 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 researchbased 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 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 eventbased 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.

Wealth Creation Portfolio

Investment Objective

The 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.

Strategy

Wealth 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 Portfolio

Wealth 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. 

Methodology