Once you have evaluated your portfolio, the next step is to examine various alternatives to fine-tune your portfolio for your needs. Anu has the following portfolio:
She had built this portfolio over time using her low cost brokerage for stocks and her bank for the mutual funds. Anu had recently received a significant bonus and was looking to invest a large part of this lump sum. While she was happy with the portfolio returns, she was concerned that the portfolio’s risk return characteristics showed a higher risk than she was comfortable with. She wanted to use the lump sum to invest in funds that would reduce the risk of the portfolio without compromising returns. She was open to selling components of her existing portfolio that are risky.
Her wealth managers gave her a list of debt and balanced funds that they felt would be appropriate for Anu based on her requirements. On Qfinr, she created multiple scenario portfolios by simply duplicating her existing portfolio. For each scenario portfolio she added the funds that she had short-listed and then ran Qfinr’s analyse capabilities to get a quantitative appreciation of the characteristics of the various scenarios. She also used Qfinr’s comprehensive search features to build a list of potential funds
The wide variety of sort and filter options allowed Anu to narrow down her search of options
Using the shortlist from the wealth managers and her own exploration on Qfinr, Anu was quickly able to narrow down her scenario portfolios to a single portfolio that she felt more comfortable with.
In deciding her target portfolio, Anu used the summary tab to look at her asset allocation, top 10 holdings, and sector allocation. She used the Stress Test to explore the historical stress the portfolio may have gone through. She explored the specific risk return characteristics of all her portfolio components and used the quantitative analysis from Qfinr as additional input in her decision making process. Before finally proceeding, she sat down with her wealth manager and had a comprehensive data driven discussion with her wealth manager about the various alternatives and taking into account her specific circumstances, objectives and aspirations. Unlike in the past when Anu simply relied on ‘tips’ and ‘recommendations’, she felt that she was able to make a much more informed decision and was able to ask her wealth manager questions which she would not have been able to ask without the insights she got from Qfinr.
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