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Review Mechanism

Re-balancing your portfolio should be a process as it helps in getting a right blend of asset classes in your portfolio. Generally, this is achieved by taking profits out of certain high-performing assets and re-investing them in the under performing assets. Regular rebalancing of your investment portfolio allows you to ensure that your investments are aligned with your financial objectives. In addition to this, rebalancing inculcates a disciplined approach towards investing and stops you from making rash decisions. More importantly, periodic portfolio rebalancing helps you to cut down risk associated with your investment.

  • Review your asset allocation: The first thing you need to check is adherence to the agreed asset allocation and any deviation will be highlighted to client.. Here again, you need to check that whether the current asset allocation is in line with your financial objectives.
  • Review your liabilities and obligations: If your asset class needs a reshuffling, you also need to check your current financial liabilities and obligations. You then need to update your financial goals, if necessary.
  • Re-balance the portfolio: Now you have a clear idea of your current asset allocation, changes (if any) in your financial liabilities. That will determine what changes you need to make re balance your portfolio.
  • Do not forget tax implications: This last step is usually missed by many. Whatever rebalancing you do in your portfolio, you need to be well aware of the tax implications. You should start planning for tax right after your finish rebalancing your portfolio.
  •  Exposure to a particular sector is highlighted and Earning  growth of major companies is monitored & reported
  • Return on equity/Portfolio is tracked
  • Correlation matrix is reported
  • Promoter pledges in portfolio is flagged