Asset Allocation & Re-balancing

At the start of any investment, our systems establish the target asset allocation of the investor. This target allocation depends on the age, investment objectives and risk profile (Know your risk profile) of the investor. At the end of every year, we compare the target allocation with the current asset allocation and if there is significant deviation, we recommend a suitable action. The investor can either choose to follow the recommendation or set a new asset allocation target.

Portfolio rebalancing is important to ensure that one remains invested in the best funds. While rebalancing may not be needed every now and then, it is a good practice to evaluate the portfolio once every year to ensure that selected funds continue to merit being a part of the investor portfolio. We therefore do an annual exercise to evaluate our fund selection. If we feel that due to certain reasons, a particular fund does not fit into our selected portfolio of funds, we recommend our investors to switch their existing investments to better funds.