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Asset Class Understanding

Deep structural analysis of asset allocations, fund categories, and sectoral exposures across traditional and alternative investments.

Asset Class Understanding

Scope — Automatic decomposition of portfolios into asset classes, fund categories, sectors, and geographies, with benchmark-aware analytics for both traditional (equity, debt, hybrid) and alternative (AIF, PMS, unlisted) instruments.

Executive Summary

Asset Class Understanding enables wealth managers to see not just what a client holds, but how those holdings are structured across the investment universe. The capability extracts allocation data from statements (via Nexus), enriches it with market metadata (via yfinance and internal master data), and computes structural analytics including sector concentration, market-cap bias, geographic exposure, and alternative asset penetration.

It powers both the Portfolio Review module in the Agentic Backend and the interactive allocation visualizations in Sentinel frontend.

The Problem

Indian wealth management involves complex, multi-asset portfolios:

  • Direct Equity — Large-cap, mid-cap, small-cap, thematic
  • Mutual Funds — Equity, debt, hybrid, solution-oriented, index
  • AIFs — Category I (VC/PE), Category II (real estate, distressed), Category III (hedge)
  • PMS — Discretionary, non-discretionary
  • Fixed Income — Bonds, NCDs, FDs, CPs
  • Alternatives — REITs, InvITs, unlisted equity, structured products

Clients rarely have a unified view. Statements use inconsistent categorization. Manual aggregation across CAS, AIF SoA, and PMS reports takes hours per client.

Architecture

┌─────────────────────────────────────────────────────────────┐
│                 Asset Class Understanding                    │
├─────────────────────────────────────────────────────────────┤
│                                                              │
│  ┌─────────────┐    ┌─────────────────┐    ┌─────────────┐ │
│  │   Nexus     │───▶│  Allocation     │───▶│  Sentinel   │ │
│  │  Extraction │    │  Calculator     │    │  Frontend   │ │
│  └─────────────┘    │  (Agentic)      │    │  (Charts)   │ │
│                     └─────────────────┘    └─────────────┘ │
│                              │                               │
│                              ▼                               │
│                     ┌─────────────────┐                     │
│                     │  Market Data    │                     │
│                     │  (yfinance /    │                     │
│                     │   internal)     │                     │
│                     └─────────────────┘                     │
│                              │                               │
│                              ▼                               │
│                     ┌─────────────────┐                     │
│                     │  LLM Narrator   │                     │
│                     │  (Orchestrator) │                     │
│                     └─────────────────┘                     │
└─────────────────────────────────────────────────────────────┘

Classification Hierarchy

Level Taxonomy Source
L0 Asset Class (Equity / Debt / Hybrid / Alternative / Cash) Computed from ISIN + scheme name
L1 Fund Category (Large-cap, Mid-cap, Credit Risk, etc.) AMFI / internal master
L2 Sector / Theme (IT, Pharma, Infrastructure, ESG) Holdings-level enrichment
L3 Geography (India, US, Global, Emerging) Fund mandate + factsheet
L4 Instrument Type (Listed, Unlisted, Structured, Derivative) Exchange / OTC flag

Personas & Journeys

Portfolio Manager

  1. Reviews a client’s aggregated asset allocation donut chart
  2. Identifies 35% concentration in mid-cap equity (above risk threshold)
  3. Drills down to specific schemes and their sectoral bets
  4. Generates a rebalancing proposal with target allocation bands
  5. Exports the analysis as a PPTX slide for investment committee

Family Office CIO

  1. Compares allocation across 8 family entities
  2. Detects overlap — 3 entities hold the same PMS strategy
  3. Assesses alternative asset penetration (12% vs 20% target)
  4. Requests scenario analysis: “Impact of +5% gold allocation on Sharpe ratio”

Risk & Compliance

  1. Monitors sectoral concentration limits across the book
  2. Flags clients with >15% exposure to unlisted securities
  3. Generates regulatory reporting (SEBI investment adviser norms)
  4. Tracks AIF Category III leverage ratios

Key Features

Feature Detail
Auto-Classification ISIN-based lookup + NLP on scheme names for unmapped instruments
Benchmark Comparison Relative allocation vs Nifty 50, Nifty Midcap 100, CRISIL Hybrid indices
Overlap Analysis Identifies duplicate stock / fund exposure across schemes
Concentration Risk Sector, issuer, and scheme-level concentration metrics
Scenario Modeling What-if allocation changes with projected risk/return impact
Alternative Asset Drill-Down AIF/PMS/unlisted decomposition with liquidity scoring
Historical Trend Allocation drift over time from sequential CAS ingestion

API Surface

Method Endpoint Purpose
POST /api/v2/pipeline/process Extract allocation data from statement
POST /api/v1/orchestrator/invoke Portfolio review with allocation narrative
GET /api/v1/dashboard Aggregated allocation metrics

Security, Compliance & Operations

  • Master Data Governance — Fund classifications validated against AMFI daily dump
  • Unlisted Instrument Handling — Flagged with liquidity risk score; requires human confirmation
  • Regulatory Alignment — SEBI IA regulations, PMS guidelines, AIF SEBI circulars
  • Audit Trail — Allocation models versioned; changes to classification logic tracked