Comprehensive Investment Process

The asset advisory service functions as a malleable structure, offering you the flexibility to take care of short term opportunities. Through a comprehensive investment process with a strategic plan in place, it makes room for tactical allocations to make the most of short term opportunities.

Need for Tactical Allocation

The concept of tactical allocation is to counteract the rigidity of a long term strategic asset allocation strategy. The necessity for tactical allocation arises to enable:

• Short-term, tactical deviations from the mix to capitalize on unusual or exceptional investment opportunities
• Market timing consideration in portfolio decisions, allowing you to participate in favourable economic conditions.

Leverage Tactical Returns

The investment philosophy for tactical asset allocation is based in the belief that over time, changes in your psychology as an investor and dynamism in market forces can lead to possible temporary changes in investment recommendations. Although markets do not always offer such arbitrage, but the time over which wealth is invested strategically lengthy, and so there maybe periods of misevaluation that can be leveraged using the tactical allocation process.

Delivery of this Process

The objective of tactical asset allocation is to move among various asset classes within a risk-controlled framework to seek an additional source of return. This is done in an attempt to take advantage of short and intermediate term market inefficiencies. By doing this, the firm is capable of managing your exposure to market risk.

The Strategic Asset Allocation Practice

Various investment firms follow a strategic asset allocation process. For instance, Kotak arrives at your strategic asset allocation strategy in the following manner:

• The risk score is plotted on the Efficient Frontier, which is a combination of the best possible asset allocation sets for different risk profiles.
• Based on the risk score, your investment advisor will engage in a dialogue with you and start incorporating various other qualitative factors, family preferences and tactical views.
• In case of a family level asset allocation, the strategy is formulated for your family or for your individual specific allocations.

Kotak offers Asset Advisory Services. Contact us to know more.