Existing Portfolio Review
Existing Portfolio Review is synonymous to a “Health Check” of your existing portfolio that you have created.
About our service
Many investors underestimate the amount of risk in their portfolios and how they can easily improve their returns by
making some modest changes. You might be familiar with the risk-reward concept, which states that the higher the risk of
a particular investment, the higher the possible return. However, many investors do not understand how to determine the
level of risk their individual portfolios should bear; and when considering a portfolio's volatility, an investor may find
it difficult to assess the optimal risk-reward combination.
Thus, we offer this service for the investor to assess their present risk vis-à-vis their expected return, so that you can
evaluate your portfolio as follows:
- What is the current outlook for my stocks?
- What changes should I make to improve my portfolio positioning?
- Am I being rewarded for the amount of risk I am taking?
- Am I properly positioned to deal with the current market trend?
Objective
The objective of a portfolio review is to identify the risk and return associated with an existing portfolio.
Portfolio review involves assessing the stock allocation of a portfolio and balancing risk against performance.
Portfolio optimization is all about identifying strengths, weaknesses, opportunities and threats in the choice of
stocks and many other tradeoffs encountered in the attempt to maximize return for a given appetite for risk. Portfolio
performance measures provide the necessary information for investors to assess how effectively their money has been
invested. Many investors tend to focus exclusively on investment return, with little concern for investment risk.
While portfolio returns are important, without evaluating risk-adjusted returns, an investor cannot possibly see the
whole investment picture, which may inadvertently lead them to hold substandard portfolios.
Scope Of Work
We use our in-house proprietary software to ascertain the risk return prevailing in the market along with the risk
associated with your portfolio. The scope of work of our review and the consequent structure of the review report is
as follows:
Risk-return analysis of the existing portfolio. Among other portfolio performance tools, our portfolio reviews take into account:
1. Return-to-Risk Ratio of a portfolio which helps assess risk-adjusted returns
2. Expected Portfolio Return based on Capital Asset Pricing Model (CAPM) which factors in systematic risk which is measured by beta, and
3. Standard Deviation of a portfolio which determines the volatility of a portfolio according to the disparity of its returns over a period of time.
Extensive company-specific investment analysis of all the stocks in the portfolio, which includes conducting:
1. Fundamental analysis of a company based on its financials, and
2. 2. Intrinsic valuation of stocks using equity cash flow methodology
Recommendations in terms of which stocks can be held on to, and which need to be divested and other modifications and additional investments that need to be made to the portfolio, if any. However, recommendation regarding purchase of new stocks , if any, and the modified optimal holdings of each stock i.e. stock allocation are not specified.
Based on our portfolio review report, investors may make adjustments on their own, or can choose to retain beed invest to manage their existing portfolio under Existing Portfolio Management Service, or create a new portfolio for them altogether to complement their existing portfolio.