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Home / Money / Personal Finance /  How Saurabh Mukherjea of Marcellus invests his money

Saurabh Mukherjea, founder and chief investment officer (CIO) at Marcellus Investment Managers, allocates a whopping 90% of his personal investment portfolio towards equity. The balance 10% is invested in the debt segment—fixed deposits (FDs) to be specific. “We (my family) keep our debt investments in FDs at a minimal level that is required to give us a safe harbour in case of any untoward event," he said

Mukherjea shared his portfolio details for the special annual Mint series – Guru Portfolio, which started in 2020, to understand the impact of the pandemic on the personal investment portfolios of leaders in the financial services space.

The series looks at how respondents’ investments have fared, the changes made to their portfolios, and the investment lessons they have for investors.

Investment philosophy

Mukherjea’s Indian equity portfolio has been managed by Marcellus Investment Managers. As he is part of Marcellus‘ Investment Committee, he has a “little bit of say" in how his portfolio is managed.

Talking about their investment style, he said, “My colleagues and I at Marcellus look for clean, well-managed companies with dominant franchises and we load up on them regardless of the sector and whether they are small-cap or large-cap. Then we sit on that position and try to earn 10x returns in 10 years. By and large, this has worked for me."

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Marcellus’s investment philosophy is inspired from coffee can portfolio strategy, which suggests investing in high-quality stocks and holding the concentrated portfolio for a long-period untouched.

“I have held much of the same set of stocks for many years now. Generally, I have seen that every year, one-third of the portfolio does very well (and I try not to get too excited about that) and one-third does not go anywhere (and I try not to lose sleep about that). The trick I realized a decade or so back is to look at the portfolio in totality rather than looking at specific stocks," he added.

Debt and gold

Mukherjea said that he doesn’t believe in investing in debt. “It makes no logical sense to me as to why I would want to take on the credit risk of an Indian corporate for, say, 6% post-tax return when CPI inflation in India runs at that level," he added.

 

Talking about why he doesn’t have exposure to gold, Mukherjea said that he doesn’t see the logic of investing in gold.

He pointed out that with gold, you get returns lesser than equities when volatility is the same as equities.

Takeaway

Mukherjea’s portfolio reveals that he prefers the equity asset class to meet his financial goals such as children’s education and retirement. Historically, equity has proven to be the best asset class that can help build wealth over the long term.

His buy-and-hold strategy also highlights the importance of holding the equity investments for a long period without getting impacted by the volatility in the stock market.

His high equity exposure has, however, been coupled with maintaining an emergency corpus that can cover his family expenses for three years.

“My wife and I try to keep three years’ worth of living expenses in FDs," he added.

He and his family also lead a modest lifestyle. “We live the same lifestyle that we did 20 years ago when we had very little money in hand," he added.

(Note to readers: Trough this series, we try to highlight the basic tenets of personal finance such as asset allocation, diversification, and rebalancing. We do not suggest replicating the asset allocation of Mukherjea, as personal finance is individual-specific and differs from one person to another.)

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