How Technology in Portfolio Building is a future for Investment Portfolio
Technology now plays an important role in the financial
lives of consumers. But what exactly are we talking about when we refer to the
influence that technology is having on creating a Portfolio (be it a Mutual
Fund or Portfolio Management Services)?
As an investor, you need to decide how you will
allocate your portfolio as well as what kind of investing philosophy you wish
to follow. You need to determine how much of your individual judgment you want
to use for building your portfolio, compared to going with the overall flow of
the market. That is where active and passive investing styles come into play.
Broadly Investment style is divided into 3 parts, they are as follows:
1. Active Investing –
An actively managed fund means a
fund manager has more involvement in the decision making, is more active in
looking after which stocks and bonds go in and out of a mutual fund portfolio
and when.
2. Passive Investing –
A passively managed funds, the
fund manager cannot decide the movement of the underlying assets.
3. Quant Investing –
A
quant fund is an investment fund whose
securities are chosen based on numerical data compiled through quantitative analysis. These funds are considered non-traditional
and passive. They are built with customised models using software programs
to determine investments.
We all have heard about
many companies getting AMC approvals from SEBI like NJ Mutuals, SAMCO, Zerodha
etc. In my opinion, many of these companies may come up with this strategy where
the portfolio may be created on the basis of the Quant Investment Strategy.
The detailed meaning and
important points for each strategy will soon be posted in further articles, then keep investing.
Dream – Plan – Invest –
Enjoy
Comments
Post a Comment