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31st August - 2013

Hot Topic of the Week

GOAL BASED ASSET ALLOCATION

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Last week at the Financial Markets!!!

• SENSEX rose by 650 points (3.49%) and closed to 19270 at end of the week.

• (FIIs) remained net buyer in equity and debt segment with net inflow of Rs. 882 crore and Rs. 1689 crore respectively.

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News Impact

• Core Sector grows at four month high of 3.1% in July

• Having weight age of 37.9% in the overall IIP, Positive IIP growth can be expected.

• Indian services PMI fell further to 47.6 in August

• GDP may reduce further as service sector has 60% contribution to GDP

• Rating agency may downgrade Indian economy

• FII outflows may start.

Last week at the Financial Markets!!!

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Price Performance of Different Asset Class

Sensex Crude $/bbl

Silver $/t oz

Copper $/MT

Dow Jones

EURUSD Gold USDINR

-1.00%

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%3.49%

2.68%

1.62%

0.85%0.76%

-0.33%-0.69% -0.70%

Next Week in the Financial Markets...?

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• IIP (Index of industrial production) numbers and CPI (inflation) data for the month of July, will be released on 12th September 2013

• Price hike in petroleum products like diesel, kerosene, and LPG.

Hot Topic of the Week

GOAL BASED ASSET ALLOCATION

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Asset Allocation

• An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets considering various factors like:

» Asset class» Goals Based » Country/Economic diversification» Risk Profile» Age

• Thus the major objective of ‘Asset Allocation’ is diversification of risk to maximize the returns.

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Goal Based Asset Allocation- Introduction

• Traditionally, investments were done with a view to earn maximum returns on the portfolios.

• While this approach has proven to be very effective in helping to maximize the risk-return relationship of a portfolio, it can make it challenging for investors to measure how well they’re doing toward achieving specific goals.

• With goal based investing, the focus of the investment approach is on funding the personal financial goals.

• Here current asset allocation is evaluated against client’s goals . Also investment horizon(s) and the willingness to take risk are accounted for in the process.

• The objective is to maximize the probability of reaching the objectives whilst minimizing downside risk. Knowledge Plus for Wealth +

Goal Based Asset Allocation- Parameters

1. Type of the goal

2. Time horizon of each goal

3. Priority of the goal

4. Risk Appetite.

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Case Study 1: Priority & Time HorizonGoals of Mr. A

Priority

Low

High

Short Term Long Term

International Tour Next Year

University Fees of Mr. A’s Child after 2 years

Comfortable Retirement after 20 years (Living Expenses to keep

pace with inflation

Buy a Villa Abroad after 20 Years

Time HorizonKnowledge Plus for Wealth +

Asset Allocation for Mr. A

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• High Priority: Short Term• Low Risk

• Low Priority: Long Term• High Risk

• High Priority: Long Term• Moderate Risk

• Low Priority: Short Term• Moderate Risk

International Tour

Comfortable Retirement

University Fees

Buying Villa

THANK YOU

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Research Desk

@VALUE PLUS - The Family Office

Office: (0265 -2324600,6629800)Email: info@valueplusinv.comWebsite: www.valueplusinv.com