Research And Execution

The creation of an investment portfolio best suited to your needs arises from deep research and understanding of the various products available. You may have a fair idea of which asset classes and product types interest you, but you will need to further choose from various schemes under each product type and then execute them. Given the volume of choices available in the market, many investors appoint an investment firm to handle these activities.

Research Capability

Evaluating investment products involves assessment on its own merit and then in comparison with competing products. This is easier said than done as products that are seemingly different will still need to be evaluated due to similar risk return profiles or underlying features. It becomes important to have access to research that concisely sums up products based on your risk tolerance and return objective.

For your understanding, here is an example of how Kotak carries out mutual fund research on a set of equity schemes:

• Tier I – Quantitative Assessment

  Measure risk /return for at least 24 months for all equity schemes considered.

• Tier II – Quantitative & Qualitative Assessment

  Explore fund manager style ratios, based on the schemes selectivity, timing, risk management.

• Tier III – Qualitative Assessment

  Due diligence should be given to AMC, fund manager, CIO, AUM, other schemes of the AMC.

• Scheme Recommendation and Monitoring

  Based on the research findings, the best scheme should be recommended and monitored for its performance over the investment period.

Execution

Your decision to invest in a certain scheme comes with the need for execution of such an investment. In this scenario, you will benefit the most with a dedicated team of managers:

• Relationship Manager

  The Relationship Manager is someone who has a complete understanding of your risk profile and attitude towards risk. Your Relationship Manager must have a strong understanding of your objectives towards investments to be able to recommend the right product.

• Service Manager

  The Service Manager will enable seamless handling of the backend and operational requirements. This will keep your investment process hassle free and paperless wherever possible. He will regularly follow up on operation requirements with various manufacturers and others to keep up a smooth process.

Investors must therefore choose a firm with the capacity to access a wide range of products, advise you on your investment choices and execute these through the right channels.