Does your money work as hard as you? Is your financial portfolio healthy and on track to provide for your financial goals? Financial wellness can be maximized if you can plan ahead, have access to knowledge and new ideas, the perseverance to see through those plans, all while staying nimble in the face of untoward events.
Asking the right questions
To truly construct and manage a hardworking, healthy financial portfolio, every investor must first ask some pertinent questions to themselves.
- Is my current asset allocation a conscious decision based on my goals and risk appetite? Is my portfolio optimally diversified?
No asset class is consistently the best performer. Disciplined investing is important, just like a team of 11 bowlers or 11 batsmen can’t win you a match. A balance needs to be struck between diversification and concentration. Diversification should be meaningful and the ‘stars’ in your portfolio need a chance to shine.
- Have I selected the right fund managers and investment products suited to my goals?
Working with the right fund managers can significantly change the risk-return profile of your portfolio. This requires careful due diligence at the time of investment. Similarly, choose products that suit your specific return, risk and liquidity requirements.
- Am I able to draw out money whenever required?
One must be careful not to lock up a major portion of one’s portfolio in long tenure, close-ended funds or asset classes that are illiquid. Emergency funds should be parked in highly liquid investments, to cover for any untoward expenses or losses.
- Are my investments tax and cost efficient? Have I picked the most tax-efficient investments? Are the fund managers in my portfolio motivated to outperform?
Are the funds in your portfolio needlessly expensive? Returns are often eroded due to high costs (fees as well as taxes) that compound over time. Performance costs need to be viewed as incentives for the fund manager. Though counterintuitive, sometimes performance fees may lead to higher net returns.
- Do I have winning ideas in my portfolio for the extra zing?
Significant wealth can be created by investing early in ideas that have the potential to become huge over time. Identifying these ideas and gaining access to them, becomes key in this case. More and more disruptive ideas are coming up in the private market or alternatives space, which are generally less correlated with markets, and provide a natural diversification. Yet, it is not an easy path to tread. One needs expertise to sift through an enormous amount of data and the requisite experience to make the right call.
- Is my portfolio braced for rough market conditions?
Large capital losses caused by market routs require an even larger subsequent profit for the portfolio to recover fully. Frequent portfolio reviews, or periodic “health checkups” of your portfolio, entailing in-depth drill down into underlying securities can substantially mitigate risks.
Avendus Wealth Management (AWM) has been helping their clients navigate the above questions, in the bid to enhance their financial portfolios for the last one decade.
The parent company, Avendus Capital started its operations in Mumbai in 1999 (as Coolstartups.com), and quickly pivoted to an investment bank in 2000. As India’s financial and capital markets evolved, Avendus transformed into a full-services financial services firm, offering asset management, credit solutions and wealth management services, in addition to investment banking. Today, backed by American global private equity giant Kohlberg Kravis Roberts (KKR), Avendus has a presence in 10 cities across India, the US, UK and Singapore.
In was in 2010 that Avendus ventured into wealth management (AWM), after realizing the need for this service among its entrepreneur clients, who were busy building companies that became unicorns. They needed a trusted hand to help manage their newly acquired wealth. From that day till today, Avendus has grown from strength to strength and today manages close to USD 3.3 Bn across 1000+ families and corporate treasuries.
Even amid the pandemic, AWM continued to grow, embarking on a technology-led journey that digitised the entire wealth platform, scaled up its investment solutions and family office offerings, launched a new lending proposition and strengthened its direct equities offering. In the year when businesses were struggling, AWM added ~200 families as clients, and was at the leading edge of identifying unique ideas and handholding clients during this period. Little surprise then, AWM was adjudged as the ‘Best Independent Wealth Manager – India Domestic’ at the 2020 Asian Private Banker’s Awards. The firm also ranked big across key categories in Euromoney Global Private Banking and Wealth Management Survey, 2021, underscoring their winning journey on the path of excellence.
With its deep industry network, in-house investment expertise and stringent product evaluation and advisory frameworks, AWM endeavours to offers high quality investment solutions to high net-worth individuals and family office clients. The company also regularly curates innovative deals in venture capital, venture debt and private equity, through its extensive in-house research and an industry network of more than 100 private equity and 50-plus venture capital funds.
Demystifying wealth management
To demystify the science of wealth creation and make people aware of how investments can aid in building affluence, Avendus Wealth Management has partnered with CNBC-TV18 to bring forth a series titled “Quest to Invest”. In the series, topics like the creation of wealth through investment in digital and tech India, whether one should invest in start-ups, what are the other newer and exciting avenues for investments, will be discussed and debated.
Reflecting upon the soon-to-be-launched series, Nitin Singh, MD & CEO, Avendus Wealth Management, shared his take: “India continues to be a favourite investment destination for foreign investors, NRI investors and domestic investors alike. It offers secular growth opportunities across industries at scale. Stability of political leadership, consistency of monetary policy, low volatility of currency, vibrant capital markets, transparent regulation and stable tax regime offer a great recipe for future investments. The Indian start up eco system is now globally known and tracked. There are millions of millionaires that will be created in the next decade. We are enthused to work with new age entrepreneurs, evolving family offices and treasuries. Through our partnership with India’s leading financial news channel, CNBC-TV18, we wish to share how we are helping our clients create wealth on a sustainable basis across asset classes, and what investors should be looking at within their portfolios.”
The series “Quest to Invest” would be launched soon. Watch this space for more details.
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Avendus Wealth Management Pvt Limited (“AWM”) or its affiliates may have a relationship with entities discussed in this communications. AWM or its affiliates may act as a principal or market maker of the securities or instruments mentioned or may act as an advisor to (or seek to advise) the issuer. The data contained in a communication may be obtained from a variety of sources and may be subject to change. Avendus Wealth Management and its affiliates disclaim any and all liability for the information, including without limitation, any express or implied representations or warranties for information or errors contained in, or omissions from, the information. Avendus Wealth Management Pvt Limited and its affiliates, employees and officers shall not be liable for any loss or liability suffered by you resulting from the provision to you of the information or your use or reliance in any way on the information. The information contained in this communication is not tax, legal, financial, or accounting advice. The views of the author may differ from others at AWM. No investment decision should be made in reliance on such material, which is condensed and incomplete, does not include all risk factors or other matters that may be material, does not take into account individual investment objectives, financial conditions, or needs, and is not a personal recommendation or investment advice or a basis to consider AWM to be a fiduciary or other type of advisor.”
This is a partnered post.