QVGS Continental income

Continental Income

Income-creation with Principle Preservation
using Multi-asset & Multi-strategy Approach

Overview

The Continental Income portfolio is exposed to Indian Fixed Income through Corporate and Government Bonds in order to preserve capital and create income useful for income replacement or supplementation.

Core Investment Objectives

of the Income Portfolio

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I. Preservation

Access wealth (for contingencies) as and when required using:

  • Gulf Algorithm for Corporate Bonds
  • Africa for Government Bonds
Satellite Investment Objectives

of the Income Portfolio

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A. Income

Generating income from preserved capital for consumption

  • Gulf Algorithm for Corporate Bonds
  • Africa for Government Bonds

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Income Portfolio


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Portfolio Features

Solutions, System & Strategy

Solution

Investment Objective 

Core Portfolio
  • Preserve wealth with a time horizon of 10 years and beyond
  • Gain by investing in Multi-asset & Multi-strategy portfolios
  • Create income for replacement cash-flow or supplementation cash-flow
System

Parameters 

Multi-Asset
  • 2 Asset Classes (Corporate Bonds | Government Bonds)
  • Quarterly Fund Review for Corporate & Government Bonds
  • Mutual Funds holdings only
Strategy

Portfolio Features 

Multi-Algorithm
  1. Strategic Asset Allocation
  2. 2-D Diversification for 2 Asset creating 5 Risk Configurations
  3. Strategic Barbell Principle
Suitability

Preferences, Capacity & Requirements

Risk Preferences

Exposure to volatility 

Multi-Configuration

Suitable for: All Risk Profiles

Risk Preferences Criteria for Core Portfolios
Risk Capacity

Minimum ticket size of investment 

HIGH
  • Minimum Capital: 10 Lac.
  • Ticket Size: Low ✕ | Medium ✕ | High ✓
Risk Capacity Criteria for Core Portfolios
Risk Requirements

Minimum Holding Period 

10 Years+
  • Long-term (to be realized after 10 years or beyond)
Applications

Practical Uses 

Cash-flow Waterfall

Best used to:

  • Create Replacement Cash-flow
  • Create Supplementation Cash-flow
Asset Allocation

Meeting the Investment Objectives of the Foundation Portfolio

Glide-path Investing

Strategic Asset Allocation 

Age-decade-linked Glide Path
  • A Glide Path is a strategic asset allocation that changes with age by moving to more conservative assets as individuals mature.
  • The Income portfolio uses an Age-decade-linked Glide Path that moves from a higher allocation to Corporate Bonds in the 20s to a higher allocation to Government Bonds beyond the 60s.
  • Corporate and Government assets form a Strategic Barbell between asset classes which moves its balance with time.
  • Allocation does not change every year since it is not tax-efficient, but only changes once a decade as individuals mature and enter different phases of their lives.
Preservation Assets

The Investment Objective of Parking Capital in Safe Assets

India Corporate Bonds

Managed using the Gulf Algorithm

Features of the Gulf Sub-Portfolio

  • Takes exposure to short-duration corporate debt with a duration from 1 to up to 3 years.
  • Mixes different proportions of 100% AAA, 90% AAA and 80% AAA debt funds in various proportions to form 5 different risk configurations.
India Government Bonds

Managed using the Africa Algorithm

Features of the Africa Sub-Portfolio

  • Takes exposure to fixed and variable duration government debt with a duration greater than 3 years.
  • Mixes different proportions of fixed maturity and variable maturity government debt funds in various proportions to form 5 different risk configurations.
Invest in the Income Portfolio

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Open a Mutual Fund Investment Account to invest in the
Income Portfolio


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Principal Officer
Continental Suite

Multi-Asset Portfolios for Growth, Preservation, Income-creation and Profit-generation.

QVGS Continental tax
View Details
The Continental Family of Portfolios

Specific needs such as Income Generation and Tax Saving need specific solutions. Hard-earned capital used for income generation requires:

  • Capital Preservation
  • Maximum Availability of Income
  • Tax Efficiency

Tax savings employs locked-in solutions which are volatile and require de-risking capital by profit-taking. The Continental Suites provides specifically tailored solutions that can easily be implemented using 3 strategies combined to make 2 portfolios.

Inspiration Behind The Continental Suite

The Continental Suite is inspired by The continental features on the earth shaped as Golden Spirals. A golden spiral is a natural shape in which continental features fold when faced with tectonic forces.

  1. Gulf is inspired by the shape of the Gulf of Mexico
  2. Africa is inspired by the shape of the the African continent
  3. Himalaya is inspired by the shape of the Himalayan Range folding at the Pamir Knot and the constant erosion of the mountains as they grow.
Asset Allocation
for Core Portfolios

Asset allocation involves dividing your investments among different assets, such as stocks, bonds, gold, cash, etc.

External View: Different assets have different characteristics and increase or decrease in value at different points of time (market cycles) owing to various conditions affecting an economy or the world at a point in time. Since these conditions are very hard to predict diversifying into various assets becomes essential for an investor.

Internal View: Asset allocation is also relevant to the investment objectives of the investor. For an individual or a family, the asset allocation will be guided by the life-stage and wealth levels. Since wealth levels are relative (at a given point of time) and life stages are predictable (for a few generations), asset allocations can be reasonably determined. For a non-individual, the allocation will be guided by more-clear cut objectives defined by its investment policy or charter.

Asset allocation can be done in 2 ways:

I. Dynamic

Dynamic asset allocation requires frequent adjustment of the mix of asset classes to suit market conditions basis an underlying formula.

  • For medium-term portfolios 5 to 10 years.
  • Rebalance according to a schedule.
  • Efficient for portfolio characteristics like lowering volatility or enhancing returns.
II. Strategic

Strategic asset allocation requires investors to set target allocations for various asset classes and only rebalance the portfolio at certain triggers.

  • For long-term portfolios beyond 10 years.
  • Rebalance according to an event occurrence.
  • Efficient for lower tax and better returns.
2-D Diversification
Inter-Asset and Intra-Asset Diversification

Diversification means investing in multiple assets and their variants. This is akin to owning multiple businesses which are independent of each other. The intention is to bank on the fact that not all businesses will perform badly or fail at the same time. This means some growth and safety will be provided by each asset class at different times for the invested corpus.

Diversification can not only be done in between asset classes (inter-asset diversification) but also within an asset class (intra-asset diversification). These are the 2 dimensions of 2-D Diversification.

I. Inter-Asset Diversification

The first dimension or the inter-asset diversification is determined by the Asset Allocation strategy. It involves splitting up capital between different asset classes. The trade-off here is between preservation and growth. Asset classes in order of lower safety to higher safety are as follows:

Preservation Assets (Government Bonds > Corporate Bonds) >> Accumulation Assets (Gold) >> Growth Assets (U.S. Equity > India Equity)

Typically, for the individual, a higher percentage of Growth assets are preferred in youth, and more Preservation assets are taken up as the individual matures. This allocation can be fixed (static/ strategic) or variable (dynamic/ tactical).

II. Intra-asset Diversification

Diversification can also be done within an asset class by taking exposure to different components of the asset class. This exposure is highly linked to the volatility of the different components of the asset class. Volatility can be easily liked to a single major parameter of the asset class. The various parameters for different asset classes are as follows:

Variability of Duration (Government Bonds) – This means that funds exposed to constant maturity bonds are less risky than those which are exposed to variable maturity bonds i.e. actively managed.

Quality (Corporate Bonds) – Quality of debt i.e. AAA, AA, A, BBB, BB, B, etc, ratings are directly linked to the volatility and returns of the bonds. Lower-quality debt carries a higher risk of default but also can give more returns. Lower-quality debt is also more volatile.

Touch-frequency (Gold) – Strategies which hold gold for longer are less risky than once which tactically manage (move in and out of the asset) the market cycles of gold at a higher frequency.

Specialization (U.S. Equity) – In a developed economy like the U.S. specialized companies (such as technology) carry more risk than the general economy, but also carry the potential of growing faster than the general economy.

Market-cap (India Equity) – In a developing but large market like India, the size (or market capitalization) of the companies is a good indicator of risk involved with them and hence the volatility. larger size carries less risk, smaller size more risk as well as returns.

The 2-Dimension of Risk can be crossed over to meet various investment objectives for various risk profiles as follows.

Asset Class
Asset Parameter
Variation
 
From less risky
 to more risky assets
 
Variation within
an asset class

Categories within
the asset class.
Government Bonds (India) Variability of Duration Fixed Duration | Variable Duration
Corporate Bonds (India) Quality 100% AAA | 90% AAA | 80% AAA
Gold Touch frequency High-touch | Low-touch
U.S. Equity Specialization S&P500 | NASDAQ100
India Equity Market-cap (Size) NIFTY50 | NIFTY100 | NIFTY NEXT50 | NIFTY MIDCAP150
5 Point Risk Criteria
for Core Portfolios

Criteria of 5 Point Scale for Indian Equities:

  • Conservative (limited to NIFTY50)
  • Moderately Conservative (limited to NIFTY50 & NIFTY100 in different proportions)
  • Balanced (limited to NIFTY50, NIFTY100 & NIFTY NEXT50 in different proportions)
  • Moderately Aggressive (limited to NIFTY50, NIFTY100, NIFTY NEXT50 & MIDCAP150 in different proportions)
  • Aggressive (limited to NIFTY100, NIFTY NEXT50 & MIDCAP150 in different proportions)

Criteria of 5 Point Scale for U.S. Equities:

  • Conservative (limited to S&P500)
  • Moderately Conservative (limited to S&P500 & NASDAQ100 in different proportions)
  • Balanced (limited to S&P500 & NASDAQ100 in different proportions)
  • Moderately Aggressive (limited to S&P500 & NASDAQ100 in different proportions)
  • Aggressive (limited to NASDAQ100)

Criteria of 5 Point Scale for Gold:

  • Conservative (limited to Sagittarius A Strategy)
  • Moderately Conservative (limited to Sagittarius A & Sagittarius B Strategy in different proportions)
  • Balanced (limited to Sagittarius A & Sagittarius B Strategy in different proportions)
  • Moderately Aggressive (limited to Sagittarius A & Sagittarius B Strategy in different proportions)
  • Aggressive (limited to Sagittarius B Strategy)

    Criteria of 5 Point Scale for Corporate Bonds:

    • Conservative (limited to 100% AAA)
    • Moderately Conservative (limited to 100% AAA & 90% AAA in different proportions)
    • Balanced (limited to 100% AAA, 90% AAA & 80% AAA in different proportions)
    • Moderately Aggressive (limited to 100% AAA, 90% AAA & 80% AAA in different proportions)
    • Aggressive (limited to 100% AAA, 90% AAA & 80% AAA in different proportions)

    Criteria of 5 Point Scale for Government Bonds:

    • Conservative (limited to Fixed Maturity)
    • Moderately Conservative (limited to Fixed and Variable Maturity in different proportions)
    • Balanced (limited to Fixed and Variable Maturity in different proportions)
    • Moderately Aggressive (limited to Fixed and Variable Maturity in different proportions)
    • Aggressive (limited to Variable Maturity)
    3 Point Risk Capacity Criteria
    for Core Portfolios

    Criteria 3 Point Scale:
    Minimum ticket size invested one-time or cumulatively per annum.

    • Low (Up to 1 lac)
    • Medium (1 to 5 lac)
    • High (5 lac and above)

     

      SEBI Registration Certificate
      License granted on 11 September, 2020

      Investment advisory – Number of complaints
      Data and Trends

      Data for the month ending April 2022

      Sr. No. Received From Pending at the end of last month Received Resolved Total Pending# Pending Complaints > 3 months Average Resolution time^ (in days)
      1 Directly from Investors 0 0 0 0 0 0
      2 SEBI (SCORES) 0 0 0 0 0 0
      3 Other Sources (if any) 0 0 0 0 0 0
      Grand Total 0 0 0 0 0 0

      ^ Average Resolution time is the sum total of time taken to resolve each complaint in days, in the current month divided by total number of complaints resolved in the current month.

      The trend of monthly disposal of complaints

      Sr. No. Month Carried forward from the previous month Received Resolved* Pending#
      1 April 2021 0 0 0 0
      2 May 2021 0 0 0 0
      3 June 2021 0 0 0 0
      4 July 2021 0 0 0 0
      5 August 2021 0 0 0 0
      6 September 2021 0 0 0 0
      7 October 2021 0 0 0 0
      8 November 2021 0 0 0 0
      9 December 2021 0 0 0 0
      10 January 2022 0 0 0 0
      11 February 2022 0 0 0 0
      12 March 2022 0 0 0 0
      13 April 2022 0 0 0 0
      Grand Total 0 0 0 0

      *Inclusive of complaints of previous months resolved in the current month.
      #Inclusive of complaints pending as on the last day of the month.

      The trend of annual disposal of complaints

      Sr. No. Year Carried forward from the previous year Received Resolved* Pending#
      1 2020-21 0 0 0 0
      2 2021-22 0 0 0 0
      3 2022-23 0 0 0 0
      Grand Total 0 0 0 0

      *Inclusive of complaints of previous years resolved in the current year.
      #Inclusive of complaints pending as on the last day of the year.

      Investor Charter
      Investor Charter in respect of Investment Adviser (IA)

      A. Vision and Mission Statements for investors

      • Vision

      Invest with knowledge & safety.

      • Mission

      Every investor should be able to invest in the right investment products based on their needs, manage and monitor them to meet their goals, access reports, and enjoy financial wellness.

      B. Details of business transacted by the Investment Adviser with respect to the investors

      • To enter into an agreement with the client providing all details including fee details, aspect of Conflict of interest disclosure, and maintaining the confidentiality of information.
      •  To do a proper and unbiased risk – profiling and suitability assessment of the client.
        • To obtain registration with Know Your Client Registration Agency (KRA) and Central Know Your Customer Registry (CKYC).
        • To conduct an audit annually.
        • To disclose the status of complaints on its website.
        • To disclose the name, proprietor name, type of registration, registration number, validity, complete address with telephone numbers, and associated SEBI regional/local Office details on its website.
        • To employ only qualified and certified employees.
        • To deal with clients only from official numbers.
        • To maintain records of interactions, with all clients including prospective clients (prior to onboarding), where any conversation related to advice has taken place.

      C. Details of services provided to investors (No Indicative Timelines)

      • Onboarding of Clients
        • Sharing of agreement copy
        • Completing KYC of clients
      • Disclosure to Clients
        • To provide full disclosure about its business, affiliations, compensation in the agreement.
        • To not access client’s accounts or holdings for offering advice.
        • To disclose the risk profile to the client.
      • To provide investment advice to the client based on the risk-profiling of the clients and suitability of the client.

      D. Details of grievance redressal mechanism and how to access it

      • In case of any grievance/complaint, an investor should approach the concerned Investment Adviser and shall ensure that the grievance is resolved within 30 days.
      • If the investor’s complaint is not redressed satisfactorily, one may lodge a complaint with SEBI on SEBI’s ‘SCORES’ portal which is a centralized web-based complaint redressal system. SEBI takes up the complaints registered via SCORES with the concerned intermediary for timely redressal. SCORES facilitates tracking the status of the complaint.
      • With regard to physical complaints, investors may send their complaints to:- Office of Investor Assistance and Education, Securities, and Exchange Board of India, SEBI Bhavan, Plot No. C4-A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051.

      E. Expectations from the investors (Responsibilities of investors)

      • Do’s
        i. Always deal with SEBI registered Investment Advisers.
        ii. Ensure that the Investment Adviser has a valid registration certificate.
        iii. Check for the SEBI registration number.

      Please refer to the list of all SEBI registered Investment Advisers which is available on the SEBI website at the following link: https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intm Id=13

      iv. Pay only advisory fees to your Investment Adviser. Make payments of advisory fees through banking channels only and maintain duly signed receipts mentioning the details of your payments.

      v. Always ask for your risk profiling before accepting investment advice. Insist that Investment Adviser provides advisory strictly on the basis of your risk profiling and take into account available investment alternatives.

      vi. Ask all relevant questions and clear your doubts with your Investment Adviser before acting on the advice.

      vii. Assess the risk-return profile of the investment as well as the liquidity and safety aspects before making investments

      viii. Insist on getting the terms and conditions in writing duly signed and stamped. Read these terms and conditions carefully particularly regarding advisory fees, advisory plans, category of recommendations, etc. before dealing with an Investment Adviser.

      ix. Be vigilant in your transactions.

      x. Approach the appropriate authorities for redressal of your doubts/grievances.

      xi. Inform SEBI about Investment Advisers offering assured or guaranteed returns.

      • Don’ts

      xii. Don’t fall for stock tips offered under the pretext of investment advice.

      xiii. Do not provide funds for investment to the Investment Adviser.

      xiv. Don’t fall for the promise of indicative or exorbitant or assured returns by the Investment Advisers. Don’t let greed overcome rational investment decisions.

      xv. Don’t fall prey to luring advertisements or market rumors.

      xvi. Avoid doing transactions only on the basis of phone calls or messages from any Investment adviser or its representatives.

      xvii. Don’t take decisions just because of repeated messages and calls by Investment Advisers.

      xviii. Do not fall prey to limited period discounts or other incentives, gifts, etc. offered by Investment advisers.

      xix. Don’t rush into making investments that do not match your risk-taking appetite and investment goals.

      xx. Do not share the login credentials and passwords of your trading and Demat accounts with the Investment Adviser.