How Radhika Gupta of Edelweiss is investing for her newborn son

“We (my husband Nalin Moniz and I) started an SIP for Remi in 2022, when he was just three months old. As his guardian, we can act on his behalf and manage the SIP till he turns 18. Remi invests in passive Large & Mid Cap 250 Fund, which gives him broad exposure to the growth of the Indian economy. “This investment can help us have more serious conversations on investments and finance as they grow up,” says Gupta during a conversation with Mint for the Guru Portfolio series. In this series, leaders from the financial services industry share how they’re handling their finances and investments.

lifestyle shift

Gupta says she has been trying to strike a work-life balance since the birth of her child in June last year. “I have come back from pregnancy and childbirth, and I feel that in itself is a big lifestyle change. Now, I am involved in AMFI (Association of Mutual Funds in India), work, work-related travel, our Trying to find a way to balance all the professional commitments with the baby, new fund offers etc. I don’t think there has been a bigger lifestyle change.

Gupta, author of Limitless, says 2022 has kept her very busy. In August, soon after Remi was born, the family shifted to their new home in Parel, an upscale area of ​​Mumbai, after getting interior designing done. He shifted some of his arbitrage fund investments (for contingency fund) to short-term cash allocation last year for interior designing work. “The interior work was a big expense. It was a big target, which was accomplished last year. Now, there is no major expenditure that is coming our way,” Gupta said.

investment strategy

Gupta says he has more or less maintained his asset allocation since last year. Around 60% of its allocation is in Balanced Funds (70:30 equity:debt mix), 15% in Mid & Small Cap Funds, 15% in International Funds (a combination of Developed Markets and Emerging Markets) and 10% in Options. His alternative investments are through an Alternative Investment Fund managed by Edelweiss AMC and small holdings in some startups.

His total portfolio has delivered flat returns of 0.4% over the one year period from April 2022 to March this year, which can be attributed to sluggish equity markets on both domestic and international fronts during this period.

Internationally, Gupta has investments in both developed markets (US fund) and emerging markets. Gupta prefers broad diversification into international markets and avoids global investment themes.

Gupta had planned to add gold to her portfolio in view of the steep rise in inflation, but she has not been able to do so so far. She says she can still add it to her portfolio through a multi-asset fund.

While she hasn’t made any major changes to her investment portfolio, she says she is holding on to her existing SIPs even after the mandatory skin-in-the-game rule introduced by markets regulator the Securities and Exchange Board of India. The rule meant that 20% of the salary of the employees is paid as investment in the AMC’s own mutual fund schemes with a lock-in period of three years.

Gupta says that this rule has actually helped him to grow his investments as he continues with his existing SIPs.

As her income continues to rise, she says she plans to top-up her SIPs. “I have a post-tax savings target. This year, some of the money was used to prepay part of the home loan due to a rise in interest rates.”

Gupta says that 75% of his own portfolio is in schemes of Edelweiss AMC. She says that she invests in some schemes of other AMCs, but has a preference for her own AMC. This is because he has great comfort and awareness when it comes to his own AMC’s investment procedures, administration etc.

While choosing an external AMC for her investments, she looks at a few factors. “I see if I can trust the AMC, my comfort with the AMC and also the size. For example, I would not prefer very large sized schemes in the mid and small cap space.”

Gupta is looking to top up her contingency fund (which was used for interior designing work) through her annual bonus. She wants to keep the contingency fund as a provision for one year’s expenses.

Travel

Gupta and her husband had visited Morocco last year. This was his first international trip after the pandemic ended. She recently went to Goa. She is now planning to fly to Singapore and go on a short domestic trip with her family.

Insurance

Gupta has taken group life insurance from his employer. He has not taken any additional cover.

“My husband and I have discussed whether we should get health cover before the age of 40, while we are in good health,” she adds, but did not elaborate on the plans.

advice to investors

“For new investors, volatility in the markets is a good time to rethink about one’s portfolio. Just because taxation is less efficient, doesn’t mean you shouldn’t take debt. Taxes aren’t the only thing. People compare Fixed Deposits with Debt Mutual Funds, but there is a lot different; the liquidity position is different, for example. Don’t change everything just because of one tax change. I think hybrid funds are the best way to do asset allocation method. They were a great way to do asset allocation in the old tax structure. In the new structure, they are an even better option. That is also something I follow. Core asset allocation can be done through hybrid funds , complemented by mid and small cap funds, as per one’s risk appetite and return expectations,” says Gupta.

“Investors should also remember that even a large variation in investments has tax implications. So, it is expensive in that sense. It is advisable to give a fund at least some time to decide whether it meets your expectations or not.”