‘10-15% in gold, worried about inflation': Zerodha's Nithin Kamath on family's asset allocation 

Zerodha's Nithin Kamath has revealed that as a family, the Kamaths have allocated 10-15% in gold since they are worried about inflation. In a conversation with Shekhar Tomar, Assistant Professor, Economics and Public Policy, Indian School of Business (ISB), Kamath shared his scepticism on land as an asset class, but backed gold as a better investment avenue.

"In a world full of inflation, I think gold still seems to be something. It's a decent asset class to be in, but when I say gold, [it's] not jewellery," Kamath said. 

He added: "I think for us as a family it's [exposure to gold] maybe 10 to 15%. It's a large allocation because we are personally very worried about inflation," Kamath said. 

But, when it comes to land, the co-founder of the stock broking platform has contrarian views. "I get trolled for saying this, but I can't believe why real estate is so expensive in this country," Kamath said.  

"Because of the [Rainmatter] foundation, we work with a lot of people in the social sector working in the villages. So, a lot of farmers have this notional valuation of their land. If you think your land is worth Rs 25 lakh an acre and that is going to give you Rs 25,000 rupees a year, will you work on the land? You will not. You'll think 'okay, let me sell half an acre every year'.

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Kamath cited an incident where his non-profit Rainmatter Foundation, which supports environment efforts, wanted to purchase land adjacent to a forest in Krishnagiri to thwart a villa project. However, the foundation faced difficulties as the seller demanded an unreasonable price.

"This land problem is everywhere. The first thing that we did as a foundation was pick up a restoration project in a place called Krishnagiri around 60-70 kilometres from here (Bengaluru). A 100-acre piece of land, and this guy [builder] quoted us a price. He was trying to turn it into a villa community. It was adjacent to a forest, we said 'you know, we need to stop this from happening'. We wanted to kind of get our hands dirty and do some execution ourselves."

"I was seriously questioning him. I said, 'Dude, how does it make sense for a land here in the middle of nowhere for what you're quoting?' There's nothing. There's no yield from this land, there's nothing that grows here. How do you justify [the price]?'"

Kamath stressed that after an investment there has to be returns. He said: "A land is like a company. There has to be some dividend. It can't just be that everyone's going to somehow keep upping the price over a period of time without any dividend. I don't get it. Everyone needs a piece of property for peace of mind, like a home to live in. That's a given. But as an investor, I'm not sure." 

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