Home/ Money / Personal Finance/  How Bank Bazaar’s Adhil Shetty juggles five credit cards

Adhil Shetty, CEO of BankBazaar owns five credit cards, each tailored to a regular expense. Shetty, who runs one of the largest credit card marketplaces in the country, has reaped significant benefits through rewards earned on these cards, but is extra careful about not defaulting on bill payments. In an interview with Mint, Shetty shared his thoughts on credit cards, the investment strategy he follows and other bits of his personal finance journey for the ‘Guru Portfolio’ series. Edited excerpts from the interview:


What is your current portfolio allocation?

About 80% is in equity and 20% is in debt. The house that I and my family live in is my only real estate investment.

Don’t you have any gold or alternate asset exposure at all?

I do buy gold as anniversary and birthday gifts for my wife, but it’s limited to the sentimental value of the gold as it is in the form of jewellery that she enjoys owning. Currently, I don’t have any alternative investment per se. But I should call out that I have my equity ownership as a founder at BankBazaar, which I think gives me significant exposure in terms of alternative investment in the fintech or the startup space.

How have the different asset classes in your investment portfolio performed over the past year?

My equity portfolio is primarily in passive index funds. In the past year, it has delivered about 3.5% absolute returns but I invest in equity with a long-term horizon in mind and one year doesn’t give the right picture. If you look at indices over the last decade, my investments have delivered about 12% CAGR.

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My current debt portfolio is in ultra-short term mutual funds. Return on my debt portfolio is not too important for me as it is for my short-term needs, such as vacations, child’s fees, etc., and for emergencies. Stability is important for short-term requirements.


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Do you have an investment advisor or an MF distributor? Or do you take Portfolio Management Services (PMS) considering that you’re an HNI?

I don’t take any professional advice or services. I’ve handled my investments and overall finances on my own since the beginning. When I went to Columbia for graduation, one of the tenets of corporate finance I learned over there was that the market typically performs better than actively managed funds. Data too corroborates this. If you look at the one-year period ending June 2021, which was a fairly turbulent period, the index funds in a majority of cases outperformed the actively managed funds.

I have stuck to this fundamental and have a light touch investment approach that not only will work for me in the long run–for my daughter’s education and my retirement savings–but it is also an approach which is easily understood by my family and me. I understand that there are exceptions, but I’m happy with the 12% CAGR I’ve been able to achieve with the passive BSE Sensex and the nifty 50 Fund.

Have you ever invested in stocks?

No. We need to be smart about money because protecting wealth is as important as making wealth. You don’t need to be an active investor picking stocks, taking risks in order to reap the rewards of the stock market changes.

One basic of investing that I learned in college has greatly influenced me– the index presents the efficient frontier between risk and return. I do understand that there are exceptions, but frankly, I don’t have the foresight or the time to pick out the winners and losers, among stocks or actively managed funds. So I just stick to the index.

Are you planning to change your investment strategy?

I’ve been thinking about diversifying into equal-weighted index funds and an index that invests in a large number of companies, say 100 or even 200 companies, compared to 30-40 companies that the main index has.

The challenge with, let’s say, the BSE Sensex and the Nifty 50 is that the top 10 companies typically hold 66% weightage because the big companies tend to dominate the index. But, an equal weighted index fund will not go heavy on the big companies and give exposure to smaller companies as well, which I believe will do better over time once they start to innovate and grow faster than the largest companies today. The idea is to have a broad base.

Entrepreneurs often fail to segregate personal and business finances for a long time after they start their venture. How has your journey been on that front?

The separation was easy for me as BankBazaar started raising institutional money early on. Once the Waldens, Sequoia and Amazons of the world invest in you, the segregation is automatic because you’re a professionally run company, you’re presenting quarterly MIS (Management Information System) reports and you’re going through due diligence with each round of financing. So, the segregation between business, personal and institutional money happened right from day one.

The challenge I faced was different. I was so involved with managing my corporate finances, that I put my personal financial management on the back burner. I think, I was quite late by the time I started investing and bought insurance.

You sell credit cards to everyone. How many do you own?

I own five credit cards but before giving any other information, I want to call out that I manage them prudently. This includes paying all the bills first thing every month.The oldest card in my collection right now is an air-miles card that I got five years back. I’ve been able to buy international holiday tickets for my family with rewards earned on this card. When the pandemic hit, there was no use of the card so I converted the accumulated rewards into Amazon gift vouchers and used them to buy books for my daughter. Two other cards that I use regularly include a co-branded card that offers 6-12 months no-cost EMI on electronic goods every month and one gives me 5x accelerated rewards on fuel.

Are you regularly on the lookout for new cards depending on new offerings in the market?

Not really. Each of the cards I got, was mapped to a need. I bought the air-miles card when it was the number one category in credit cards. After the pandemic receded, my fuel expenses increased as I drove my daughter to preschool so, I bought the Save Max card that gives me accelerated reward points and waives surcharge. So, again, a need drove it. I use it for all my fuel and grocery expenses.

Do you have any loans currently? Or loans that you have serviced in the past?

I had a student loan when I was studying in the USA and I took a car loan for my first car. Both the loans are closed now.

I have a home loan that I recently refinanced to a lower rate of 50 basis points just before the rate hike. I opted for BankBazaar switch-hit feature, which enabled me to retain the EMI amount despite the lower interest rate, reducing the loan tenor.

Prepaying the loan will reduce my interest outflow and help me close the loan faster.

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Updated: 07 Sep 2022, 09:22 AM IST
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