What are Model Portfolios ~ A Financial Planner Tool | Enrich Life ...

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Model Portfolios

Since investors? risk appetites vary, a single portfolio cannot be suggested for all. Financial planners often work with model portfolios ? the asset allocation mix that is most appropriate for different risk appetite levels. The list of model portfolios, for example, might read something like this:

Young call centre / BPO employee with no dependents

50% diversified equity schemes (preferably through SIP); 20% sector funds; 10% gold ETF, 10% diversified debt fund, 10% liquid schemes.

Young married single income family with two school going kids

35% diversified equity schemes; 10% sector funds; 15% gold ETF, 30% diversified debt fund, 10% liquid schemes.

Single income family with grown up children who are yet to settle down

35% diversified equity schemes; 15% gold ETF, 15% gilt fund, 15% diversified debt fund, 20% liquid schemes.

Couple in their seventies, with no immediate family support

15% diversified equity index scheme; 10% gold ETF, 30% gilt fund, 30% diversified debt fund, 15% liquid schemes.

Please note that these percentages are illustrative and subjective. The critical point is that your financial planner should have a model portfolio for every distinct client profile. This is then tweaked around based on specific investor information.

Thus, a couple in their seventies, with no immediate family support but very sound physically and mentally, and a large investible corpus might be advised the following portfolio, as compared with the previous model portfolio.

Source: http://enrichwise.com/2012/10/22/what-are-model-portfolios-a-financial-planner-tool/

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