Financial Modelling
PART 1:
Asset Classes Analysis (1-10)
Return Top Performing
Benchmarki
Asset Class Risk (Expecte Companies/Fund
ng Agencies
d) s
Apple, Microsoft,
Large-Cap Moderat 10-12% NIFTY 50, S&P
Reliance
Stocks e p.a. 500
Industries, TCS
Moderat NIFTY Midcap Page Industries,
Mid-Cap 12-15%
e to 100, Russell Bajaj Finance,
Stocks p.a.
High 2000 InfoEdge
Tata Elxsi, Deepak
Small-Cap 15-20% NIFTY
High Nitrite, Aarti
Stocks p.a. Smallcap 100
Industries
Equity Axis Bluechip
Moderat 10-14% CRISIL,
Mutual Fund, Mirae Asset
e p.a. Morningstar
Funds Emerging Bluechip
SBI Magnum Gilt
Low to
Debt Mutual CRISIL, Value Fund, ICICI
Moderat 6-9% p.a.
Funds Research Prudential Liquid
e
Fund
Government of
Government
Low 5-7% p.a. RBI India Savings
Bonds
Bonds
Corporate Moderat 7-10% HDFC Ltd Bonds,
ICRA, CRISIL
Bonds e p.a. Tata Capital Bonds
Moderat 8-12% Godrej Properties,
Real Estate e to p.a. NA DLF, Prestige
High (variable) Estates
Low to NA (Gold ETFs:
5-10%
Gold Moderat LBMA, MCX HDFC Gold ETF,
p.a.
e Nippon Gold ETF)
Cryptocurren Very 20%+ CoinMarketCa Bitcoin, Ethereum,
cy High (volatile) p Binance Coin
PART 2:
Asset Classes Analysis (11-20)
Return Top Performing
Benchmarki
Asset Class Risk (Expecte Companies/Fund
ng Agencies
d) s
International 10-15% MSCI, Amazon, Tesla,
High
Stocks p.a. NASDAQ Alibaba
Embassy Office
Moderat
REITs 6-9% p.a. NA Parks, Brookfield
e
India REIT
Low to UTI Nifty Index
8-12%
Index Funds Moderat NSE, BSE Fund, HDFC Index
p.a.
e Fund
Exchange-
Moderat 7-10% Nippon India ETF,
Traded NSE, BSE
e p.a. SBI ETF Nifty 50
Funds
12-15%
P2P Lending RBI Faircent,
High p.a.
Platforms Guidelines LenDenClub
(variable)
Commoditie Variable Crude Oil, Natural
High MCX, NCDEX
s (5-20%) Gas, Base Metals
Venture NA (Fund Specific:
Very 20-25%
Capital SEBI Sequoia Capital,
High p.a.
Funds Accel)
Private 15-20%
High SEBI Blackstone, KKR
Equity p.a.
Alternative Very 15-30% Art, Wine, Antique
NA
Investments High p.a. Cars
Savings HDFC Bank, SBI,
Accounts/FD Low 3-6% p.a. NA ICICI Bank Fixed
s Deposits
PART 3:
Behavioral Research on Investor Preferences
Objective:
To understand the behavioral aspects of investment and preferences among
investors. A survey was conducted with a sample size of 75 respondents,
representing a diverse demographic group including individuals aged 20-60 years,
from various occupational backgrounds such as salaried professionals,
entrepreneurs and freelancers, across metro and non-metro cities. This broad
sampling aimed to capture a comprehensive view of investor preferences.
Key Questions in the Survey:
1. What is your annual income?
This question helps categorize respondents based on financial capacity, providing
insights into investment behavior across different income levels.
2. What is your primary investment objective? (Wealth Creation, Stability, etc.)
Understanding the motivation behind investments allows analysis of how
objectives shape asset allocation preferences.
3. Which asset classes have you invested in previously?
This provides information on past behavior and familiarity with different
investment options, which can influence future decisions.
4. What is your risk appetite? (Low, Moderate, High)
Risk tolerance is a critical determinant of investment strategy, helping to identify
correlations with income, age or other factors.
5. What is the average tenure of your investments?
This question uncovers whether respondents prefer short-term or long-term
investment horizons, key for designing portfolios.
6. How do you make investment decisions? (Self-research, Advisor,
Family/Friends)
Insights into decision-making processes can reveal reliance on external guidance
versus independent analysis.
7. What percentage of your income do you allocate to investments?
This question highlights saving and investment habits, offering a glimpse into
financial discipline and priorities.
Summary of Findings:
Risk Appetite- 30% Low, 50% Moderate, 20% High.
Respondents with higher income levels were more likely to take
on high-risk investments such as mid-cap and small-cap stocks,
while those with lower incomes favored low-risk options like fixed
deposits and debt mutual funds.
Investment Objectives- 60% Wealth Creation, 30% Stability,
10% Speculation. Investors under the age of 35 prioritized wealth
creation, while older respondents leaned more towards stability.
Preferred Asset Classes- 70% Stocks/Mutual Funds, 20% Fixed
Deposits, 10% Alternatives.
A noticeable trend was the preference for alternative
investments, such as gold ETFs and real estate REITs, among
respondents with a high net worth.
Decision-Making- 40% Self-research, 30% Advisors, 30%
Family/Friends.
Self-research was prevalent among tech-savvy younger investors,
while older participants relied more on advisors.
Tenure- Majority prefer mid to long-term investments (5+
years). However, respondents with high-risk appetites were also
open to short-term investments in volatile markets like
cryptocurrency.
PART 4:
Investment Portfolios by Annual Earnings
For Earnings: ₹10,00,000 per annum
1- Conservative Portfolio:
50% Debt Mutual Funds (Low Risk)
30% Equity Mutual Funds (Moderate Risk)
10% Gold ETFs (Low Risk)
10% Savings/Fixed Deposits
Reason: Focused on capital preservation with moderate
returns.
2- Balanced Portfolio:
40% Equity Mutual Funds
20% Large-Cap Stocks
20% Debt Mutual Funds
10% Gold ETFs
10% Real Estate REITs
Reason: Balances growth and stability for medium-term
goals.
For Earnings: ₹15,00,000 per annum
1-Growth-Oriented Portfolio:
50% Equity Mutual Funds
30% Mid-Cap and Large-Cap Stocks
10% Gold ETFs
10% International Stocks
Reason: Higher allocation to equities for long-term
growth.
2-Moderate Portfolio:
40% Equity Mutual Funds
30% Large-Cap Stocks
10% Debt Mutual Funds
10% Real Estate REITs
10% Gold ETFs
Reason: Diversified for moderate risk and stable returns.
For Earnings: ₹20,00,000 per annum
1-Aggressive Portfolio:
60% Stocks (Large-Cap & Mid-Cap)
20% International Stocks
10% Real Estate (Direct or REITs)
10% Venture Capital/Alternative Investments
Reason: Targets high returns with higher risk appetite.
2-Conservative Growth Portfolio:
50% Equity Mutual Funds
20% Debt Mutual Funds
10% Gold ETFs
10% Real Estate REITs
10% Savings Accounts/FDs
Reason: Balances risk while enabling growth.
For Earnings: ₹30,00,000 per annum
1-Wealth Creation Portfolio:
40% Equity Mutual Funds
30% Real Estate REITs
20% International Stocks
10% Commodities (Gold, Crude Oil)
Reason: Prioritizes wealth accumulation with diversified
risk.
2-High-Yield Portfolio:
50% Mid-Cap and Small-Cap Stocks
30% International Stocks
10% Venture Capital/Private Equity
10% Gold ETFs
Reason: Focused on high returns with acceptable risk.
For Earnings: ₹50,00,000 per annum
1-Diversified Global Portfolio:
40% International Stocks
30% Domestic Equity (Large-Cap & Mid-Cap)
20% Real Estate (Direct and REITs)
10% Alternative Investments
Reason: Leverages global opportunities for wealth
growth.
2-Ultra-Conservative Portfolio:
40% Debt Mutual Funds
30% Equity Mutual Funds
20% Savings/Fixed Deposits
10% Gold ETFs
Reason: Prioritizes capital preservation with steady
returns.
3-Balanced Aggressive Portfolio:
35% Large-Cap and Mid-Cap Stocks
25% International Stocks
20% Real Estate (Direct or REITs)
10% Commodities (Gold, Crude Oil)
10% Venture Capital/Private Equity
Reason: Focused on balancing risk with potential high
returns.
For Earnings: ₹1,00,00,000 per annum
1-High Growth Portfolio:
40% International Stocks
25% Domestic Equity (Mid-Cap & Small-Cap)
15% Alternative Investments (Venture Capital, Art, Wine)
10% Real Estate (Direct or REITs)
10% Commodities (Gold, Crude Oil)
Reason: Designed for aggressive wealth creation
leveraging diverse, high-growth opportunities.
2-Conservative Wealth Preservation Portfolio:
30% Debt Mutual Funds
25% Domestic Equity (Large-Cap)
20% Real Estate (Direct and REITs)
15% Gold ETFs
10% Savings/Fixed Deposits
Reason: Ideal for preserving wealth while maintaining
moderate growth.
3-Ultra-Diversified Portfolio:
35% International Stocks
30% Domestic Equity (Large-Cap & Mid-Cap)
15% Real Estate (Direct and REITs)
10% Alternative Investments (Private Equity, Venture Capital)
10% Commodities
Reason: Combines global exposure, alternative
investments, and real assets to maximize returns with
diversified risks.
