• Portfolio diversification trends: Portfolios currently allocate 40% to 60% to direct and long-only equities, 20% to 30% to credit and yielding assets such as REITs and InvITs, 10% to 15% to gold and silver, and around 5% to international feeder funds, generating overall returns of 10% to 12%.
• Investor segment strategies: Retail investors primarily achieve diversification via multi-asset funds, high-net-worth individuals use bespoke wealth managers, and family offices split capital between ultra-safe instruments and growth portfolios targeting 12% to 16% returns.
• Risk and volatility: Over a 12-year period, Government of India bonds and the Indian equity index exhibit broadly similar volatility, though equities deliver approximately twice the returns of fixed income.
• Asset allocation importance: Asset allocation accounts for 75% to 80% of portfolio outcomes, making fixed risk profiling and equity-debt splits far more impactful than frequent portfolio juggling, market timing, or individual instrument selection.