How to do Asset Allocation the Right Way | Best Mutual Fund Asset Allocation Strategies | ETMONEY
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- Опубликовано: 8 июл 2024
- Asset allocation is a very important element to successful investing. In this video, ETMONEY’s Shankar Nath takes you through what asset allocation really means as we detail three different asset allocation strategies that you can deploy on your investment portfolio starting today. This video will be packed with a lot of data and insights and comes with Hindi subtitles which you can access by tapping on the CC button
What’s covered in this video?
00:00 Introduction
01:30 What is Asset Allocation
06:38 Strategic Asset Allocation
13:12 Tactical Asset Allocation
15:38 Useful Tips and Strategies
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👉 WHAT IS ASSET ALLOCATION?
Asset allocation is the process of investing across diversified asset classes. There are two words one needs to focus on here - a) it’s a process and b) the assets are diversified.
a) Asset allocation is a process because it is constantly looking to balance the risk and returns in an investor’s portfolio to achieve the better risk-adjusted return
b) Diversified in the context of asset allocation means assets that are not correlated in terms of their performance. For example - a weak correlation can be seen when we compare the NIFTY 50 performance with that of Gold over a twenty-year period.
👉 STRATEGIC ASSET ALLOCATION
Strategic Asset Allocation refers to techniques that are aimed at providing long-term focus to your investment portfolio.
There are two commonly used approaches here.
1. Age-based asset allocation where the proportion of recommended equity assets in an investor’s portfolio is simply the balance of the investor’s age from a base value of 100.
2. Risk-profile-based asset allocation method which focuses on classifying an investor in one of five buckets i.e. conservative, income, balanced, growth, or aggressive investor.
Each of these 5 labels signifies the amount of volatility that one can take in his or her portfolio. For example - a conservative investor is risk-averse and prefers a stable rate of return even if it means compromising on a little or a lot of returns. On the contrary, the aggressive investor is return-centric and understands the variable nature of performance where investments can rise and fall heavily over shorter time periods.
Now, once the investor is classified, this asset allocation strategy goes on to proportion a fixed percentage of the asset class to each risk profile as we have explained in the video.
In our study, we go on backtest the results with four asset classes i.e. domestic equities, international equities, bonds, and gold. This backtesting helped us prove the point that a balanced investor could have made comparable returns to a NIFTY 50 only investor but by taking much less risk in his or her investment portfolio.
This is the essence of asset allocation and something that one should never forget
👉 TACTICAL ASSET ALLOCATION
Tactical asset allocation aims to improve your risk-adjusted returns by taking advantage of short-term opportunities without losing sight of the long-term direction.
This is done by using active management or risk-return models to increase or decrease exposure to certain asset classes based on macro fundamentals, valuations, and of course, the market movements.
An existing mutual fund category that does this is the dynamic asset allocation funds that follow a methodology of adjusting their investment proportion based on the highs and lows of the market often moving between equity, debt, and cash. These funds are also called balanced advantage funds
In the video, we show you the net equity position of the ICICI Prudential Balanced Advantage Fund and how it has changed it over the 12 months of the year 2020
👉 USEFUL TIPS & STRATEGIES
1. Don’t get boxed i.e. try not to make up your mind that you are a conservative investor or an aggressive investor. Doing this will make you miss out on opportunities or you might end up taking too much risk
2. Build a strategy per your present situation, goals, and risk type
3. Allocate assets differently for varied goals (but don’t overdo it)
4. Choose diverse assets whose returns have a low correlation with other asset classes
5. Periodically monitor and adjust the allocation
#ETMONEY #AssetAllocation
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The amount of work put into making the videos is remarkable.
True
Good presantation
Thank you Koushik Das
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Yes ETMoney is the best asset I've allocated
Ha ha.. Thanks!
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I have been following your videos for Months now and i have been wanting to make outstanding progress with my investment. Truly, The SP500 is a self-correcting portfolio, Following this principles, i want suggestions as to a way to protect my portfolio of $580k.
Well the bigger the risk, the bigger the reward and such impeccable decisions are better guided by professionals
Yes true, I have been in touch with a financial advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
@@sheltonPston I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
There are a lot of independent advisors you might look into. But i work with Nicole Desiree Simon and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Asset allocation has never been explained to this level tailor made to everyone. Wow 😳
Thank you
I really got the trustworthiness over ETmoney through your videos. Instead of just advertising about your platform, you guys have taken a leap ahead to provide financial education. Great work 👏
Thank you Kabilash Satheesh
आपका हर विडियो बहतरीन होता हैं निवेशकों को कुछ ना कुछ नया सीखने को मिलता हैं
These tables are gold 05:00, 09:18, 12:43,
Thank you!
I can't thank enough for these videos from Mr. Shankarnath and ET Money. Crisp and concise
Most welcome
Simply wow. The amount of information and clarity is awesome. Thank you for the great job.
This is nice one. Haven't found any video giving such a detailed information. Complex concepts are explained in a very simplified way. Thanks ET money.
Thank you very much
Lot of research represented in comprehensive way, Thnk you 🙏
Better than many paid courses I had previously done ❤️
Exactly what I was searching for since yesterday and you post this today! Couldn't have asked for a better explanation. Thank you.
Nice! Glad we could help.
Pp
Pl0lp
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This is so much better than the age method asset allocation strategy.
Thank you sir for giving a practical way to allocate our assets. So that we can minimise the risk while maintaining the return or creating higher return when the market are down in one sector.
This one videos is equal to 100 pages book... really great effort Sir. ...
Thank you so much for this beautifully simple primer. Eagerly await the video on Portfolio Rebalancing
First of all, thanks for making a video asset allocation that I've requested quite earlier and the research you and your team have done is excellent. Once an expert told asset allocation may or may not increase return but surely reduce the volatility of the portfolio and I assume your research concludes the same. However, I think an investor should consider his house or any type of real estate asset as a part of the portfolio. In fact, it plays a significant role in overall return. I request you to make a separate video on tactical asset allocation and suggest me some books, blogs, or any article to understand asset allocation especially tactical asset allocation more deeply. I usually take screenshots of your researches and note accordingly. It would be great if you put all data in one place in pdf form and provide a link to download it. Thanks again and best wishes to both you and your team.
surprisingly yesterday I got a call from my fund advisor about asset allocation and you posted this video. Now I really need to think about it. Many thanks.
Do share the ETMONEY videos link to your advisor. We are certain he too will appreciate the content
Wonderful discussion. Learned so much. Thanks ET money for this exhaustive information. 🙏🙏
I have never seen such an adequate data-backed and well-informing video for asset allocation in the Indian personal finance youtube space, good job guys keep it up !!
Thanks for the vote of confidence
If you start making notes as you see video, you can be sure it really has value. This is by far best video I have seen on asset allocation. @Shankar, the way you explain it cherry on top as its so easy to grasp the concepts and new perspectives you put forward. Thank you
Great to hear that. Thanks for the kind appreciation Sudarshan Patil
This video cannot be made better... Thank you!
:) Thanks
Very well said Shankar. This is where a financial advisor comes in picture.
best video ever on asset allocation
sincere gratitudes to et money team 🙏
Crystal clear presentation. Kudos to the research behind the whole production. ❤️
Thanks
This video was very insightful!
Thank you for making this and explaining the core concept of asset allocation and why it's the most important thing when investing! Great video!
You are right, investing is the quickest way to financial freedom...
Excellent analysis behind every video. Thanks for making this available
Insightful content.. Pls post a video to understand ones risk profile.
Clear and crisp. thanks for the efforts you put into gathering the data. I was searching for this content for months.
Glad it was helpful.
Sir, I would like to rate this video as one of the best ever finance videos I have ever seen. Kudos to you.
Thank you very much Rahul Banerjee
Thank you for the insightful video. I have few queries.
1. How do we realise gains every year with different asset allocations.
2. We all have multiple financial goals. Is asset allocation in different assets recommended to be done for all goals?
Will love to see 1 video with end to end process of goal setting, asset allocation, realising gains and exiting investments to generate the cash for goal.
Shankar Nath's explanation decent, simple also easy to grasp Explanation.
This channel is a gem! Such meaningful advice presented in a concise mannner.
Thanks!
Thanks Shankar! for yet another amazing video. Being into data analytics field. I know how much effort you and your teams put to create data backed insights for us. Keep it up! Really wish to talk to you someday. Maybe plan live Q&A on RUclips someday...
Thank you very much
Wonderful explanation with data points. I appreciate the hard work that has gone to explain asset allocation using actual data
Most welcome and thanks for the appreciation
Really helpful that you included the key points of discussion in the description section of the video! 🙏
Thank you!
Masterclass in Asset Allocation! Thank you for doing this!
Our pleasure! Thanks for the appreciation
Marvelous information, thanks a lot.
Thank you Shankar for such a clear explanation on such complex subjects. Cannot thank you enough.
Thank you very much
Very highly worth information,For senior citizens for SWP ,Where to.invest in inmutual funds expecting 7 percent after 1year for long time
Thank you sir. Appreciate.
Thanks a lot 😇
Very good learning & Presentation on Asset allocations
As always outstanding.. Recently started watching your videos & its worth every bit. Thanks a Ton
Glad you like it! Most welcome
Thanks to share
I like ur videos as they have visual charts n table. This way we can easily understand. Thanks. Grt job
Most welcome. Glad you found them useful
Thats the best video on the subject so far, such a complex thing explained so very well. Thank you for sharing your knowledge.
Wonderful work . This sort of analytical approach is the way to go rather than expressing opinions like others.Your work makes understanding personal finance easy and interesting . Please keep generating such great work shankar Nath sir👍
Will do. Thank you Vinay Sanath
Wow... That's some solid content and solid research... I've loved equities and it would be hard to let go of it even by 20% for debt and gold allocation... That table where Nifty50 all time returns equalled Balanced one's returns is a shocker and eye opener... Seems quite an uphill task to re allocate cuz I don't understand anything except equity MFs. You know you've got to follow up on this ET.!
One word !! Brilliant. When will we expect a video on Rebalancing on Assest Allocation?
Vow! What a high quality research. Very professional and fact based. These videos deserves a lot
Thanks a lot
Good wisdom sir!
This is remarkable knowledge and the effort they are putting in should hopefully lead them cross many million subs!!
Thank you
Thank you very much sir, it is a great financial education for beginners in MF world, I am getting more clarity on technicalities which aid in framing investment strategy
This is what is I am finding since couple of years. Very informative video specially the data you have shared. So kind of you Sir. Keep posting knowledge. Regards
Glad it was helpful! Thanks
Wonderful...Thanks for detailed analysis!
Most welcome
Loved the video. Took lots of notes
Time and time you guys outdo yourselves! Another informative video.... Kudos to you guys 👏👏👏
Much appreciated! Thx
thank u so much for this video
One of the best prepared video. Kudos to analysts as well
Excellent vedio sir, you always do indepth Research and anylysis. One of the best presenter on RUclips....
Thank you
Thanks et
Absolutely liked the content and presentation. Unlike other channels u present in most simple explanations n that too in English
Thank you for the video. In my overall portfolio Is contribution towardsNPS considered under equity and pf /PPF a debt?
Definitely earned my trust, kudos ETM!
Thanks
Well !! Each video is gold that I wouldn't mind putting this comment on all the videos. For me who never invested seriously, you have touched the right cords.
Thank you
Mind blowing video. Thanks for the efforts.
Most awaited thanks sir
Asset allocation makes life simpler thanks got sharing more insights about it 🤗🤗
Most welcome
What an amazing video! Take a bow, my friend!
Thanks Manan Batra
Great explanation as always,@shankar: I always love the way analysis and strategies and all the data presentation of your videos, I must congratulate your team for doing such good work and always coming up with such excellent data and analytics...😍
Thank you Anujoy Bardhan
Exactly what I was looking for. Thanks
Glad you found it useful
Great Content. Thanks for coming up with this. I am going to download a save this video.
I have a question to ask, if I do an STP of 240K over a period of 2 years from a liquid fund to equity fund how much tax would I pay?
Great explanation with graphical representation as well as facts...
Please keep doing the good work for new investors like me thank you @etmoney
Thanks for the English Content.
amazing
So clear. So well put together. Thank you for a great education.
You are so welcome! Glad that you found it helpful
Too good sir... Don't have enough words to praise the quality of your content and presentation... hats off
Thanks a ton. Glad you are liking our content
One of Best one by Shankar, waiting eagerly for next one
Thank you
Education on asset allocation at its best. Thank you very much Shankar Nath. Learnt a lot
You are most welcome
Best ever video i come across RUclips.
Thank you. Glad you liked our content
Excellent work... Admirable.. Great learning!!
Thanks a lot!
Very much informative 🤩💯🥰
This is just wow👍👍 ..Superb presentation
As usual, awesome content. Thank you for bringing such quality videos. 👍
Thanks
🔴🔴🔴Very insightful video. Thank you very much. A great learning from video 🙏🙏🙏
Superb. I appreciate your team's efforts here.. great content 👍
Thank you!
Excellent presentation & good Learning
really Kudos to the channel and presenter for such as amazing and insightful video... lots of respect !!
Thanks a ton
Excellent ❤️
Best video on Asset Allocation 🙏
Thanks a lot
Thanks for explaining so well
Thanks! Glad it was helpful!
Sir, very very data driven insights and views shared in a very simple yet effective way. Feel empowered after watching every video of yours. Great help n will continue to look up to you 👍
Thx
Shankar sir ji, your videos are always awesome and informative with good insights on the topic being discussed. Lots of thanks
Thank you very much for the kind appreciation
Thank you so much Sir. This helped me a lot :)
Most welcome
Wonderful explanation sir...thnk you
Thanks
One of the best informative articles
Thanks!
Great clarity. Thanks
Thank you
Very well explained on the strategies...excellent comparisons based on Ages...Thanks ETMoney
Most welcome. Thanks for your appreciation.