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In April 2020, when covid hit India and the country went into lockdown, Mint spoke to industry leaders in the financial services space to understand the impact of the pandemic on their personal investment portfolios. With the passage of a year, we are going back to our respondents to see how things have panned out—and whether there are any lessons for investors. In the first part of the series, we talk to Radhika Gupta, chief executive officer of Edelweiss Asset Management Company (AMC).

Equity

Due to the pandemic effect, Gupta’s personal investment took a hit of around 12-13%, by our calculations. She was predominantly invested in equity (65% of the portfolio), with the rest in debt, and equity was down 20%. Most of her money (70%) is invested in Edelweiss mutual fund schemes.

Along with the market, her investments have also recovered with the equity component up 65% over the past year. This is composed of balanced advantage funds, or BAFs (which she considers equity), mid- and small-cap funds and international funds.

Paras Jain/Mint
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Paras Jain/Mint


Gupta is not shifting between market segments or cutting down on her equity exposure. She has made additional investments in balanced advantage funds.

Debt

Interestingly, on the debt side, she keeps her money in arbitrage funds rather than liquid funds. Arbitrage funds are taxed as equity funds with 15% short-term capital gains tax for gains up to one year and 10% for a longer holding period for gains above 1 lakh. However, their returns are similar to those of liquid funds.

Home-buying

In our discussions last year, Gupta had listed a home-buying goal. “This has been largely funded and is close to completion," she told Mint.

However, a subsequent delay from the builder’s side has extended the timeline on the goal, which Gupta says should be ready by the end of the year. The home is for living in and not for investment.

“The key is to stay calm," Gupta had told Mint in April last year, and that seems to have paid off. Some investors exited equity in the early stages of the market recovery and have lost out on the rally that followed.

This did not happen with Gupta. Her high conviction in the balanced advantage strategy may have helped her stay the course.

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