New-age wealth tech firms offer baskets of bonds, loans to diversify risks

You can now diversify your debt portfolio by investing in a basket of bonds or loans offered by new-age wealth tech platforms. They are classified as Securitised Debt Instruments (SDI) that enable investors to invest in multiple assets.

SDIs are financial securities that represent ownership in a pool of underlying assets such as loans, leases, or receivables. These assets are typically bundled together and securitised, transforming them into tradable securities that can be bought and sold in the financial markets. Through the SDI route, platforms conform to regulatory guidelines laid down by the Securities and Exchange Board of India (Sebi). However, it still has credit, liquidity, and fraud risks depending on the underlying securities.

For example: Wint Wealth has launched a new product, which works like a basket of bonds (with 6-8 underlying bonds), where an investor can invest starting with Rs 1 lakh.

Since the ticket size of investment into privately placed bonds is Rs 1 lakh (for every single unit), many investors encounter difficulties when seeking to invest in bonds due to the concentration risk in a single unit. The introduction of SDIs, however, offers a solution by enabling investors to diversify their bond portfolios across multiple bonds.

Ajinkya Kulkarni, Co-Founder and CEO of Wint Wealth, said, “Like equity, bond portfolios also need diversification for risk mitigation. Ideally, retail investors should allocate 5-10 per cent of their portfolio to bonds to realise any meaningful gains. Retail investors must spare at least Rs 5-6 lakh to build a diversified bond portfolio. Very few retail investors can afford to do so. However, with Wint Basket, more retail investors can now consider building a well-diversified corporate debt portfolio. Thus, the market for corporate bonds will become more inclusive. We will continue introducing other fixed-income products to help retail investors unlock more opportunities.”

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Similarly, Grip’s LoanX, offers an SDI product where you can invest in a diversified pool of loans extended to individuals, businesses, or other entities. These loans are originated by a Non-Banking Financial Company (NBFC) granting direct access to the yields generated by these loan portfolios.

Nikhil Aggarwal, Founder & CEO, Grip, adds, “NBFC's in our country give loans. And to raise capital, they either issue bonds or enter into something called Securitisation, where they sell a pool of loans to an investor. The market for securitization in India is about 20 billion dollars. It's a very large market already. But only very large investors have access to this market. With the product LoanX, we've been able to make access possible at a small ticket size of Rs 1 lakh. So an investor is participating in purchasing a pool of loans originated by an NBFC.”

So far, Wint Wealth has over 52,000 investors, facilitating cumulative investments in corporate and sovereign gold bonds worth over Rs 1200 crore with no defaults. Grip has enabled a total investment of Rs 750 crore and has an investor community of 2.5 lakh.