Asset Allocation Model - Kotak Wealth Management
Asset Behavior - Portfolio Risk Portfolio risk arises from the variability in performance across various asset classes. Asset classes are by definition those securities which can be grouped by shared characteristics, law, regulation and their behavior in the market over time. Assets are classified by their risk and return behavior in any given market environment. Asset Allocation Practice Asset classes perform differently due to the inherent nature of the asset type. Asset Allocation Process Asset Allocation is the process of deciding how to distribute wealth among various asset classes and sectors. Stabilizing Returns Understanding how assets perform helps in achieving a more stable return variability through asset allocation decisions. Affect about 90% of return variability over time Explain about 40% of the differences in returns Asset allocation is the major contributor to portfolio risk and return.