Manager and CEO of Edelweiss Radhika Gupta has returned to social media to advise fans on how to invest in mutual funds securely. She encouraged followers to make sure “dal-chawal funds” make up “80%” of their portfolios in a series of tweets on X, the former Twitter.
Sharing an example, Gupta said she recently saw the portfolio of an investor who had invested ₹27,000 worth of monthly SIP across 31 funds, of which 15 were narrow sectoral ones, cautioning it as “a danger in these times”.
These days, it can be risky to overfill your portfolio with constrained concepts that are best suited for satellite placement. Never forget that “dal-chawal” funds should make up 80% of the portfolio! She said.
What’s about a dal-chawal fund?
Dal-chawal funds, in Gupta’s opinion, are broad-based mutual funds that are “all-weather” and “span a range of sectors.”
She cited aggressive hybrid funds and balanced advantage funds as examples, referring to flexi, multi, large, and mid-sized, broad-based 250–500 index funds as “forever funds.”
Why should I invest in dal-chawal funds?
According to Gupta, investing in broad-based funds ensures that you are protected throughout multiple market cycles and do not suffer losses due to over-allocation in one or two restricted sectors that may be on a downward spiral. In a nutshell, it refers to the classic adage: don’t put all of your eggs in one basket. A varied, broad investment portfolio ensures that you do not sink if your investment does, and that your assets should ideally balance each other out during periods of gain and loss.
The goal is not a limited theme-based fund that performs well in one cycle but not in the next, she continued, adding that active or passive investing is irrelevant.
