April 2020 Insider updates – Mutual Funds

“Never let a crisis go waste. “Adhering to that dictum, I am happy to share that we have used this crisis to make some important updates to the Insider Mutual Fund portfolios.

One of the biggest realisations from this crisis is that it is so difficult to anticipate events like this. However, the question is can you be prepared. If we haven’t so far, we will have to be.

First is our health and second is our wealth. We need to manage risks better and prevent big drawdowns in our portfolios.

With this perspective, let me highlight the key changes carried out in the April 2020 Insider update.

1. The no. of portfolios are now trimmed to just 3 instead of the 9 before. Having many portfolios can be confusing and I believe they were treading a fine line. I am sure you found it hard to distinguish too.
2. The 3 portfolios are focused with clear cut objectives. Strategically, they fit different time horizons: Wealth Preserver (all debt, short term), wealth builder (balance of equity & debt, medium term) and Wealth Enhancer (predominantly equity, long term)
3. The 3 portfolios can be used tactically too for various market situations. When markets turn very expensive (Wealth Preserver/Builder) or very attractive (Wealth Enhancer) or somewhere in between (Wealth Builder).
4. The Mutual Fund Shortlist has updates too. Pure equity schemes with large no. of stocks are being done away with.
5. Certain kind of funds such as small cap funds are not included in the model portfolios and are tagged as “work with advisors”
6. One of the key additions this time is the dynamic asset allocation category, which changes its equity allocation based on various fundamental and technical indicators, tax efficient auto rebalancing and readying the portfolio for minimal drawdowns. Surprisingly, these funds come at a low cost. Do note that it makes the returns move in a narrow range too.
7. You will also see some of the index funds as a part of the shortlist including international funds (passive) in the portfolios too.

As a follow up to these updates, we will not have a detailed note on each of the schemes in the shortlist with the rationale of their inclusion as well as comparison to peers.

So, what are you waiting for? Log in to your Insider Account and check out now.

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Have any questions? Send them to me at vipin@unovest.co

Stay safe!