TLDR: With new options in the market, what would a lazy index portfolio would yield

Most retail investors chase after the top funds in each category as recommended by morning star, money control or value research online. <Insert your favourite comparison site here>. The problem with this approach is that this list doesn’t actually mean anything. Every year the top performing funds move up and down.

If you keep constantly churning your mutual fund list to only have the top 10 funds in every category on an annual basis you will end up with a bunch of average funds providing a below average return.

What are the options - equity ?

For the retail investor, I would recommend going with index funds.

• They are fairly straight forward to understand

• They are low cost compared to actively managed funds

• No need to constantly switch

I had previously recommended these options on my blog posts

But given that there are new players in the market, it is time for a revision.

Equity portion - all direct plans or ETFs

1. UTI Nifty 50 index fund - 20%

2. UTI Nifty next 50 index fund - 20%

3. Motilal Oswal Mid cap 150 index fund - 20%

4. Motilal Oswal NASDAQ 100 ETF - 20%

5. Motilal Oswal S&P 500 index - 20%

Between these 3 funds, you will cover top 250 companies by market cap in India. S&P 500 which is the world’s most tracked index of the top companies in US and top 100 tech and tech allied companies in Nasdaq.

I wish there were more funds to cover the ASEAN market but nothing viable yet.

What are the options - Debt?

For the retail investor, I would recommend the following debt funds

For ultra short term parking of funds - less than 3 months - Go with overnight debt funds

For short term parking of funds - greater than 3 to less than 1 year - go with liquid funds

For long term parking of funds - greater than 1 year - Bharat bond FoF with varying maturity

What ratio?

• For the ultra conservative investor - 30% Equity, 60% Debt, 10% commodities

• For the conservative investor - 40% Equity, 50% debt and 10% commodities

• For the regular investor - 55% Equity, 40% debt and 5% commodities

• For the aggressive investor - 65% Equity, 30% Debt and 5% commodities

• For the ultra aggressive investor - 75% Equity, 20% debt and 5% commodities

How was the performance ?

Since some of the index funds are relatively new, i will use the underlying index to showcase the performance.

Conclusion

All this recommendation is based my observations and goal planning. If you are unsure consultant with a fee only financial planner to review your plan. These are thumb rules and individual preferences vary widely. Align your investment plans to your goals and time horizons. You might need to create multiple plans based on specific goals.

Good luck and Happy Investing.

#MyFatFIRE