What’s The Ideal Portfolio For High Risk Investors?

Aggressive investors need to forgo the “high risk, high returns” strategy while building their portfolio and take steps to shield themselves from market volatility, according to Amol Joshi, founder of PlanRupee Investment Services.

Investors can dedicate three quarters of mutual fund investment over a five-year horizon towards equities, Joshi told BQ Prime’s Niraj Shah. The lion’s share of this—around 60%—should be centered around large-cap or flexi-cap funds, with the balance going to mid-cap and small-cap funds, he said.

The remaining portion can be parked with balanced advantage funds instead of debt funds, based on the theory that equities will perform better than debt over a five-year period on a post-tax basis, he said.

According to Sunil Jhaveri, founder and chairman of MSJ MisterBond, large caps are good bets for the stability they offer, though mid caps can also be a viable option. However, investors need to be cognisant of the volatility when getting into small caps, he said.