Now Reading: Shweta Rajni explains correct debt fund allocation strategy
-
01
Shweta Rajni explains correct debt fund allocation strategy
Anand Rathi Wealth's mutual fund head Shweta Rajni says investors with a 10-15 year horizon can put 60% to 80% of their portfolio in equity and the rest in debt funds. The…
Anand Rathi Wealth's mutual fund head Shweta Rajni says investors with a 10-15 year horizon can put 60% to 80% of their portfolio in equity and the rest in debt funds. The exact mix depends on the investor's return target, which should beat inflation, and their ability to tolerate risk. For a 7-10 year horizon, the reliance on debt can be lower as equity becomes more reliable.
Rajni explained that debt's main role is to provide stability and cushion against early volatility, not to beat inflation. She suggested keeping 20% to 40% in debt based on liquidity needs and investment period. The allocation varies for each investor's goals and risk appetite.
The interview was for Business Today's show. Rajni stressed that the key question is what return the portfolio needs to generate, which then determines the equity-debt split.
Indian Opinion Analysis
This article is a basic primer, not breaking news. For the busy Indian reader, the real question is how to apply this to your own situation. The 60%-80% equity range roughly aligns with the classic '100 minus your age' rule for asset allocation. However, the advice omits two critical Indian realities: the tax treatment of debt funds (indexation benefits after three years can significantly boost post-tax returns, making them more attractive than the article suggests) and the fact that most retail investors lack the discipline for a 10-15 year horizon. The practical next step for a reader is not to decide an exact percentage, but to check if they have an emergency fund in a liquid fund before allocating anything to long-term equity. A concrete signal to watch is the RBI's repo rate decision, a cut makes existing debt funds more valuable.
Source: bazaar.businesstoday.in
This story was synthesised by AI from the source linked above.
