Under the hood, Tavaga is a robo-adviser built by experts, that crafts a precise investment portfolio customised to your needs. Tavaga’s algorithms automatically manage your investments, and help you reach your goals on time.
Index investing is a technique where you invest in funds which track market indices.
Market indices such as the BSE Sensex and NSE Nifty are based on a well-researched formula, and their prices reflect the performance of the sections of the economy they represent.
The stocks which make up these indices, and their weights in these indices, are determined automatically using a formula. Hence, the funds tracking these indices also require no human intervention for determining their portfolio. The cost of running such funds is very low, as a result.
Compare these to regular mutual funds, which have fund management teams paid in crores of rupees, that research thousands of companies to try to select the right stocks for the fund portfolio. Unfortunately, predicting the future is not easy! Index investing is not affected by any bad decisions made by fund managers.
Globally, Index investing is growing at breakneck speed while regular mutual funds have shown a decline in growth.
Index investing is at the core of robo-advisory services. It removes the human element from the whole investment process, and enables you to take advantage of techniques such as tax optimisation, Glide Path investing, and automated rebalancing to enhance the returns on your investments.
Tavaga changes the weights of different assets in your portfolio depending on market conditions, adding up
to 1.25 percent to your returns. For example, if the markets are falling, we reduce equities and buy more
A regular mutual fund-portfolio can’t be rebalanced efficiently, because exit loads of upto 3 percent will eat away at any profit that may be made through rebalancing.
Index investment products like ETFs are more cost-effective than regular mutual funds. Regular mutual funds may cost you up to 2.8 percent, while a Tavaga portfolio will only cost you about 1-1.2 percent, including your brokerage fee, of your investment. Every rupee saved on costs adds ten to your returns in the long run.
Tavaga constantly tracks your investments and your goals. As you get closer to your goal, Tavaga
automatically reduces the amount of money invested in stock funds, and moves the rest to safer assets like
government bonds and gold.
This method, called Glide Path investing, ensures your money has the opportunity to grow faster with stock funds when your goals are far away, and protects your portfolio from market crashes, by moving your money to safer assets, as you near your goal.
Some are okay with their investments riding the market waves for that extra edge, while others prefer more
stable earnings at the cost of a chance of bigger returns.
Tavaga optimises your risk by understanding your investment attitude’, and ensures your portfolio is always aligned with your comfort and preferences.