CEO Speak March 2025

Annual financial Check-Up

New Financial year 25-26, new beginnings. Most of us find ourselves steeped in yearend wraps-up, all kinds of measurements to assess our performances and planning for the next year. While market movements and fund performances often take centre stage, it is crucial to focus on fundamental hygiene factors that ensure financial security. As we step into the new financial year, it may be prudent to review your portfolio and financial hygiene items.

Here are some of the key aspects that every investor should review:

Nominations:

How many times have we seen in close quarters – friends, family, acquaintances go through long drawn visits and processes with banks and other financial institutions processing death claims and settlements. Unfortunate incidents are in no ones’ control but what is in our control is to ensure that we keep things simple and seamless for our loved ones.

Check if nomination is updated in you bank accounts, mutual funds, demat accounts and other investments. If not update it now.

General Insurance:

Assess your general insurance coverage as a part of your financial planning and housekeeping. Many have health insurance coverage from their employers, check if they are sufficient and take additional cover if required. Home and vehicle insurance also need to be reviewed. Check policy expiry dates and renew them timely. Compare policies and premiums to ensure cost-effectiveness.

Review home, vehicle, and health insurance policies to ensure adequate coverage.

Life Insurance Coverage:

Many take life insurance policies as investment tools. Check for the sum assured and the total life cover that you have. Term life insurance is important because it provides financial security to your family in case of your unfortunate demise, ensuring they can cover debts, maintain lifestyle, and meet future financial obligations. You may have taken a term policy 10 years back, check if it is enough as per your current lifestyle, loans and future earnings.

Assess the adequacy of your current life insurance cover (term cover), plan for additional cover if required.

Review emergency funds:

General thumb rule is that one must have around 6 -9 months’ worth of expenses in liquid assets (e.g. savings account, FD linked savings accounts, liquid mutual funds etc). Having too less in liquid instruments may not be wise. At the same time, many keep too much of liquid funds in their savings account in anticipation of an investment plan not realising that their hard-earned money would be lying idle for too long.

Review both the adequacy and liquidity of your emergency funds. Liquidity review needs to be done in the context of your new financial goals.

Portfolio Review:

New financial year is also a good time to review your asset allocation and financial goals. Check your portfolio performance, align it with your financial goals and rebalance if necessary. This is the time when you can review your tax planning and allocate funds accordingly. Additional asset allocation into mutual funds also can be looked at basis your short term /long term goals, risk appetite and investment goals. SIP amounts can be increased if your investable surplus go up as it adds to your wealth creation in the long run.

With dynamic market conditions and personal financial situations, it is prudent to review portfolio composition.

Keep record:

With multiple investments, accounts, policies and other financial instruments and most of them now having online access, it is critical that one keeps a tight record of everything. Store digital and physical copies in a secure location, ensuring easy access when needed.

Keeping accurate financial records is essential for smooth portfolio management and easy tracking of investments.

New financial year is also a good time to review your asset allocation and financial goals. Check for Portfolio review and rebalancing if necessary. This is the time when you can review your tax planning and allocate funds accordingly. Organising and reviewing of your financial health not only helps you in taking stock of your current situation but also help you plan your financial goals better. Taking these proactive steps at the beginning of the financial year will not only safeguard your investments but also offer you peace of mind.

Happy Investing!

Investors are requested to note that as per SEBI (Mutual Funds) Regulations, 1996 and guidelines issued thereunder, HSBC AMC, its employees and/or empanelled distributors/agents are forbidden from guaranteeing/promising/assuring/predicting any returns or future performances of the schemes of HSBC Mutual Fund. Hence please do not rely upon any such statements/commitments. If you come across any such practices, please register a complaint via email at investor.line@mutualfunds.hsbc.co.in.

Views provided above are based on information in public domain and subject to change. Investors are requested to consult their financial advisor for any investment decisions.

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