How Edelweiss’ Radhika Gupta is investing for her infant son | Mint

How Edelweiss’ Radhika Gupta is investing for her infant son

Radhika Gupta, CEO, Edelweiss Asset Management Limited (Photo: Mint)
Radhika Gupta, CEO, Edelweiss Asset Management Limited (Photo: Mint)

Summary

The head of Edelweiss AMC has already started a systematic investment plan for her nine-month-old baby

Remy Gupta Moniz is just nine months old but he already has a presence in the world of investing. He has had a systematic investment plan (SIP) in place since September. And, this has been possible thanks to his mom Radhika Gupta, 39, the managing director and chief executive officer of Edelweiss Asset Management Company (AMC).

“We (My husband Nalin Moniz and I) started a SIP for Remy in 2022, when he was just three months old. As his guardians, we can act on his behalf and manage the SIP till he turns 18. Remy has invested in a passive large and mid cap 250 fund, which gives him a broad exposure to the growth of Indian economy. This investment can help us have a more serious conversation with him on investments and finances when he grows up," says Gupta during an interaction with Mint for the Guru Portfolio series. In this series, leaders in the financial services industry share how they are handling their finances and investments.

Lifestyle shift

Gupta says she has been trying to find a work-life balance after her baby’s delivery in June last year. “I have bounced back from pregnancy and childbirth, and I think that in itself is a major lifestyle change. Now, I am trying to find a way to balance all the professional commitments I have with Amfi (Association of Mutual Funds in India), work, work-related travel, our new fund offerings, etc., and the baby. I don’t think there’s been a bigger lifestyle change than that," she says. Gupta, who joined Edelweiss AMC as the chief executive officer in 2017, is the vice chairperson on the board of Amfi.

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Graphic: Mint

Gupta, the author of Limitless, says 2022 kept her very busy. In August, soon after Remy’s birth, the family shifted to their new house in Parel, an upscale locality in Mumbai, after getting the interior designing done. She had moved some of her arbitrage fund investments (meant for contingency fund) to short-term cash allocation last year to fund the interior designing works. “The interior work was a major expense. It was a big goal, which got fulfilled last year. Now, there is no major expense as such that is coming our way," Gupta said.

Investment strategy

Gupta says she has more or less maintained her asset allocation since last year. About 60% of her allocation is in balanced funds (70:30 equity:debt mix), 15% in mid and small cap funds, 15% in international funds (combination of developed markets and emerging markets) and 10% in alternatives. Her alternative investment is through an alternative investment fund managed by Edelweiss AMC and small holdings in a couple of startups.

Her overall portfolio has delivered flat returns of 0.4% over a period of one year, from April 2022 to March this year, which can be attributed to the tepid equity markets—both on the domestic and international front—during this period.

On the international side, Gupta has exposure to both developed markets (US fund) and emerging markets. Gupta prefers broad diversified exposure to 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 yet got around doing it. She says she might still add it to her portfolio through a multi asset fund.

While she has not made any major changes to her investment portfolio, she says she has stuck to her existing SIPs, even after the mandatory skin-in-the-game rule introduced by the market regulator Securities and Exchange Board of India. The rule meant that 20% of employees’ salary is paid in the form of investments in AMC’s own mutual fund schemes with a three-year lock-in period.

Gupta says the rule has in fact helped her to increase her investments as she has continued with her existing SIPs.

As her income keeps rising, she says she plans to top-up her SIPs. “I have a post-tax savings target. This year, some money was used to prepay part of the home loan as interest rates have risen," she adds.

Gupta says 75% of her own portfolio is in Edelweiss AMC’s schemes. She says that she does invest in a few schemes of other AMCs but the preference is for her own AMC. This is because she has a lot of comfort and awareness when it comes to her own AMC’s investment processes, governance, etc.

She looks at a few things when choosing an external AMC for her own investments. “I see whether I can trust the AMC, my comfort with the AMC, and also size. For example, I would not prefer a very large-sized scheme in mid and small cap space," she says.

Gupta will also be looking to replenish her contingency fund (which got used for the interior designing work) through her annual bonus. She aims to keep the contingency fund as provision for one year worth of expenses.

Travel

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

Insurance

Gupta has group life insurance from her employer. She has not taken any additional cover.

“My husband and I have discussed whether we should go for health cover before we turn 40, while we are in good health," she adds, but did not elaborate on the plans.

Advice for investors

“For new investors, volatility in markets is a good time to rethink about one’s portfolios. Just because taxation is less efficient, doesn’t mean that you should not do debt. Tax is not the only thing. People compare fixed deposits with debt mutual funds, but a lot of things are different; liquidity conditions are different, for example. Don’t change everything just because of one tax change. I think hybrid funds are great way to do your asset allocation. They were a great way to do your asset allocation in the older tax framework. In the new framework, they are even a better option. That is also something I follow. Core asset allocation can be done via hybrid fund, supplement maybe by mid and small cap funds, as per one’s risk appetite and return expectations," Gupta says.

“Investors should also remember that too much shuffling in investments also has a tax impact. So, it is expensive in that sense. It is advisable to at least give some time to a fund before deciding whether it meets your expectations or not," she adds.

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