Given the rising home loan interest rate Radhika Gupta, CEO of Edelweiss Asset Management says that she prefers to pay off the home loan than invest in fixed-income assets.
“We have just started building the portfolio for our son. I don’t have a large allocation to gold and silver. I don't do fixed income as I have a home loan, and with current rates, it’s better to pay off the loan than invest. My debt portion is taken care of by my hybrid funds. I have small exposure to AIFs. I am looking to grow that exposure over time with a private equity and growth equity fund in AIF category which we are launching in the coming years,” said Gupta.
Investing, spending, saving
“The smart money decision I made was spending conservatively and saving and investing as soon as I started earning. I started investing at 24, after a year or two of starting earning. I was working in US then, so I used to invest in US mutual funds and in US equity mutual funds and international equity funds. My portfolio was largely equities. I started investing in Indian mutual funds shortly after I moved back here in 2009. The corpus gave me the ability to move back from the US to India and start my own business without family backing, and with the confidence that I could ride out 2-3 years without substantial income,” said Gupta.
She adds, “I am consistent with my equity holdings. My debt allocation has been reduced in the overall portfolio from 35 per cent to 20 per cent at present. I have SIPs in some international funds as well. I don’t have a large allocation to gold and silver. Currently, I don't do fixed income, my debt portion is taken care of by my hybrid funds,” said Gupta.
“My biggest money mistake was not paying attention to asset allocation. When I started earning, there was an impatience to invest entirely in equities as everyone else was doing the same and times were good. I didn’t pay attention to my own risk profile.
International markets did not perform well in the past year and for her, the strategy did not work well in past year. “One more strategy that hasn't worked for me in the past year is international allocation. I am holding global stocks, especially in emerging markets, as part of the equity segment, which has trailed India’s returns over the last year, but I continue to hold it as part of the asset allocation. Starting is usually a smart idea. Don't stress about market timing. Take it slowly so that you can make mistakes that are small and then discover what works best for you. And invest the way that works for you, not the way that others invest or out of FOMO,” said Gupta.
Themes to watch out for in the next 10 years
“Our view has always been asset allocation-focused. Rising yields offer one opportunity to lock in money at higher rates for the long term. So, long-term oriented target maturity funds in today's regime might be a very good option, especially for people who want to lock in for 10-15 years. Maybe domestically driven themes rather than export-oriented or companies with strong global business. The focus will be on cyclical that benefit from the revival of the domestic economy. Beneficiaries of the schemes like PLIs. The whole manufacturing movement will also be in the focus,” said Gupta.
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