Why this Edelweiss honcho has plans to add gold to her portfolio

Radhika Gupta, managing director (MD) and chief executive officer (CEO) of Edelweiss Asset Management Ltd, says she might add gold and some unlisted equity in her personal investment portfolio. We look at the reasons behind the moves and explore how her life has changed post-pandemic, as part of our annual series on the personal finance journey of financial services industry leaders.

Steady equity

Gupta is largely consistent with her equity holding, which she has been maintaining in the 65-70% range since 2020.

In the last one year, her equity allocation of 70% (excluding employee stock ownership plan or Esops) has delivered a return of 18%, which is in line with Sensex’s gains during the same period.

While Gupta will not be shifting between the market segments in the equity allocation, there’s a key addition to the portfolio.

“There will be no significant changes in the equity segment, but I will be adding some unlisted equity exposure via a new fund we will launch," she said. This addition will be in the alternate category of her portfolio.

The head of Edelweiss MF, which has ₹78,000 crore as assets under management (AUM), already holds 10% under an equity alternative investment fund (AIF) under the alternate asset class, which is up 12% on a yearly basis.

As per Gupta, one strategy that hasn’t worked for her in the past one year is the international allocation. She is holding global stocks, especially in emerging markets, as part of the equity segment, which has trailed India returns over the last year, but, “I continue to hold it as part of the asset allocation," she said.

Debt rejig

According to Gupta, her debt allocation has reduced in the overall portfolio from 35% in 2020 and 30% in 2021 to 20% at present. The balance has been allocated to the alternate asset class.

The debt portion, which is only in hybrid funds, of Gupta’s portfolio has delivered a return of 5% on a yearly basis, as she doesn’t look to shift between categories in the segment.

“It doesn’t make sense to hold debt out right when you have a home loan," she argues.

Further, Gupta continues to keep her contingency money in arbitrage funds, which is sufficient for at least a year.

Gold finds favour

For the first time since the pandemic broke out, Gupta said she is considering adding the yellow metal to her portfolio.

“I am considering it given the rising inflation and a fund we have in the pipeline," she argues.

As of now, Gupta doesn’t hold any gold or real estate in her portfolio.

Notably, Indian gold funds with an average return of 17.55% on a three-year basis have outperformed 15.21% gains delivered by the large-cap equity category.

Interestingly, US inflation accelerated to 8.5% in March, hitting a four-decade high. Inflation is generally supportive of gold prices.

Post-pandemic lifestyle

Covid-induced lockdowns and restrictions have redefined daily lifestyle-related habits in a significant manner in terms of diet, physical activity, and relaxation.

As for Gupta, she took up yoga and spent more time on writing. Notably, she wrote a book during the lockdown and wants to continue writing.

Incidentally, her book, Limitless: The Power of Unlocking Your True Potential, is scheduled to be released on Monday.

In terms of holidays, Gupta has been on a few short trips to Rishikesh and Udaipur (for an office offsite), and a couple of other places.

“However, travel was restricted because of my pregnancy, and is likely to be so for a while," she said.