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6 parameters to evaluate product suitabilityShyam Sunder, Peak Alpha, Bangalore

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Key Take-Aways
  • To evaluate products, HNIs should consider following 6 parameters. 1. Does the new product fit in with the overall portfolio and with your asset allocation?

  • 2. Concentration risk relative to the portfolio size needs to be considered. Can the portfolio take on this risk if the product under performs? Will it disrupt the finances?

  • 3. Replicability of the idea by cheaper means. Many take products simply because they are exclusive even though there are similar cheaper products.

  • 4. Attractiveness of the idea. Does it bring something new to the portfolio? 5. Manager capability should be considered when it comes to investing in PMS and AIFs.

  • 6. Liquidity should be a parameter as some products are locked in. After considering these 6 parameters, choose a product that brings something to portfolio.

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