Model Portfolios

When selecting a suitable portfolio management strategy for an investor, the following key factors are assessed:

• Investor’s goals (what the investor aims to achieve, expected return);
• Need for autonomy (whether investments will be managed personally or entrusted to a portfolio manager);
• Planned investment period (this will determine the choice of asset classes, their proportions, and selection of financial instruments);
• Risk tolerance (the desired return is directly correlated with the level of risk taken, and the investor must decide what level of losses they are willing to accept).

Myriad Capital’s model investment portfolios are composed of liquid, low-administration-cost exchange-traded funds (ETFs) that invest in stocks, bonds, and other securities.

When planning their investments, an investor should consider the intended investment period. It’s important to evaluate how long it might take to achieve the set investment goal. Planning the investment period helps determine how aggressive or conservative the investment strategy should be. Most investment goals can be classified into short, medium, and long-term periods. Among financial market participants, it is generally accepted that short-term investments last up to 3 years, medium-term investments 3-10 years, and long-term investments over 10 years. If you plan to start withdrawing investments within 3 years, the investment portfolio should not contain a significant proportion of asset classes with high short-term volatility (e.g., stocks).

An investor’s willingness to take on risk is one of the main factors influencing the decision on portfolio composition and diversification across different asset classes. The more risk an investor is willing to take, the greater the potential return the chosen assets may generate. Higher-risk investments tend to yield higher returns over time, but they may also exhibit greater volatility in the short term. The goal of every portfolio manager and investor is to achieve an appropriate balance between acceptable risk and return, by selecting investments that will help meet the set investment goals. When determining personal risk tolerance, one should consider acceptable fluctuations in investment value, required liquidity and investment period.

The investment return depends on the investor’s risk tolerance and the selected investment strategy. Expected annual returns (based on long-term historical data):

• Conservative: 5 – 6%
• Balanced: 7 – 8%
• Growth: 9 – 10%.

Please note that historical returns of financial instruments do not guarantee similar results in the future.