Shenoy, who has been an entrepreneur all his life, doesn’t invest in Sleep or own house. “I don’t even plan on owning a house. I do not like gold and neither do I like real estate. I am a financial asset man and not a real wealth man,” he says. The CapitalMind founder shared his portfolio details for the special annual Mint series – Guru Portfolio – to gauge the impact of the pandemic on leaders’ personal investment portfolios. Understand the financial services sector.
Equity is the largest allocation in Shenoy’s portfolio at 85%, and he invests all of this money through CapitalMind’s four Portfolio Management Service (PMS) strategies. These strategies are in large-cap, mid-cap and small-cap as well as US stocks through exchange-traded funds (ETFs), a momentum play, which is an algorithmic strategy, and an index. The allocation is around 30-40% in large-cap as well as mid-cap and small-cap, while around 10% is in US stocks.
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As an investment strategy, Shenoy does not believe in market capitalization. “The problem with capitalization-based weighting is that you assume that all companies in a certain market cap will do well at the same time. Since all market caps are correlated, it doesn’t matter how much you have in each, as long as you understand the underlying businesses,” he said. However, Shenoy acknowledges that a significant portion of his returns come from small-caps. , who have become mid-cap or large-cap. According to the financial services space expert, they are not allowed to invest in capital instruments like stocks on their own, so they can channelize equity investments through their PMS. do the route.
However, he invests in bonds on his own, which constitute about 15% of the total portfolio. For Shenoy, debt investments are primarily from a liquidity standpoint.
“My basic concept of the loan is that I will buy bonds listed on the exchange. So you have these bonds that were issued in 2013 and 2014, that continue to trade in the market. But they are at extremely attractive valuations for debt. Today, debt gives a return of 4.5% to 6%. But some of these bonds give you 8% to 10%. That’s why I use them as a better allocation than cash.”
Again, when it comes to debt investing, Shenoy does not believe in ratings. He disclosed that once he had bought the DHFL bond after it had defaulted, purely as a recovery play. “I will not buy debt just because it is rated AAA because I do not believe in ratings. Instead, I want to do business in some companies. Ratings matter less than understanding what the company does in the first place. I prefer to take a loan of an operating company rather than a financial one,” he said. Shenoy also revealed that his latest set of acquisitions has been long-term government bonds through the RBI Retail Direct platform.
When it comes to emergency fund, Shenoy keeps this corpus in a liquid fund, which is sufficient for around 10 months. The specialist also does not have provident fund in his portfolio but has a small exposure to public provident fund.
In terms of insurance, they have a term plan along with individual as well as a group health insurance plan. Interestingly, Shenoy revealed that he has never had any gold and probably won’t do so in the future. “If I were to do this, it would be just a short-term fixed income type of instrument or like a trend or momentum-based trading,” he said. The specialist also does not dwell in the alternative asset class, as he finds it to be a “distraction”. He also does not have exposure to crypto assets. Currently, Shenoy is focusing on making his startup big. “I am better suited to consolidate CapitalMind and take it into my new future. I am spending more money buying startup shares and this is my biggest alternative investment. If I am allowed, I will I would rather buy more shares of CapitalMind than anything else.”
The founder of CapitalMind also has investments in Infrastructure Investment Trusts (ask over) and Real Estate Investment Trusts (REITs), which it calls quasi rental income. I have some speculative money, which is giving returns above 12-13%.”
In terms of lifestyle changes following the outbreak of the COVID-19 pandemic, Shenoy loves black coffee and eats more protein and less carbs. Shenoy, who does salsa, climbs rocks and makes toy rockets, now orders a lot more than ever before. “This is because the number of options available to order is increasing manifold. So, I order home cooked food from a real home. Also, the kind of things I eat have gone up a lot,” he shared.
When it comes to holidays, Shenoy went to Goa in December last year and planned a short trip to Delhi the next day. Deepak will soon travel to New York and Omaha to attend the Berkshire Hathaway annual convention in the US.
As an investor, Shenoy reviews his portfolio once in six months when he wants to make any meaningful changes. “I just look at the return numbers from the perspective of what I want, which is around 12% p.a. If it is more than that, I am happy,” Shenoy said.
(Note to readers: Through this series, we attempt to highlight the fundamentals of personal finance such as asset allocation, diversification and rebalancing. We do not suggest repeating Shenoy’s asset allocation, as personal finance is individual-specific and varies from person to person.)