Looking For A Suitable Index Fund To Pick? Here's Edelweiss MFs CEO Radhika Gupta's Suggestion

This recommendation reflects Gupta’s continued advocacy for what she refers to as “dal-chawal funds,” a term used to describe stable, broadly diversified investments that should be the foundation

Radhika Gupta, MD and CEO of Edelweiss Mutual Funds, recently responded to a tweet from an investor named Mahesh, who had expressed frustration over the increasing number of index fund options in the market. Mahesh’s tweet humorously pointed out the complexity and abundance of choices, listing various types of index funds such as the traditional Nifty 50, Nifty 500, equal-weight variants, as well as funds based on market cap, factors, and themes.

Quoting Mahesh’s post on X (formerly Twitter), Gupta provided a simple suggestion for those overwhelmed by the array of options. She advised, "Since I am always talking about dal-chawal funds, if you want to pick one and only one index fund in my view: Large and Midcap 250 Index. Covers the broad Indian economy with reasonable allocation to large and midcaps.”

“Index Funds were supposed to be simple investments. Here investors are confused to choose the regular N50 or N500 OR equal weight variants of the same OR funds carved out from them OR the several factor-based variants OR other mkt cap based OR themes and sector Index Funds,” Mahesh tweeted.

This recommendation reflects Gupta’s continued advocacy for what she refers to as “dal-chawal funds,” a term she uses to describe stable, broadly diversified investments that should serve as the foundation of an investment portfolio. Unlike niche or thematic funds, which can introduce unnecessary risk and complexity, these core investments are meant to provide stability. 

Gupta has previously advised her followers to allocate 80 per cent of their portfolios to such “dal-chawal” investments, underscoring the importance of simplicity and broad diversification in mutual fund selection.

Gupta also recounted an anecdote about an investor who had allocated Rs 27,000 in monthly SIPs across 31 different funds, including a striking 15 that were focused on narrow sectors. She warned against this strategy, describing it as "a danger in these times," and emphasised that most of an investor’s portfolio should be invested in well-diversified, "all-weather" funds.