Radhika Gupta Advocates For 'Dal Chawal' Mutual Funds: A Recipe For Financial Stability

The 'dal chawal' category encompasses various fund types, including multi-cap, flexicap, hybrid, balanced advantage, and index funds

Radhika Gupta, CEO of Edelweiss Mutual Fund, said the importance of balanced investment strategies, advising investors to structure their portfolios akin to an Indian 'dal chawal thaali'— with 80 per cent allocated to stable funds and 20 per cent to thematic ones, according to ET.   

Gupta introduced the concept of 'dal chawal' mutual funds, which she describes as a diversified approach to investing. The 'dal chawal' category encompasses various fund types, including multi-cap, flexicap, hybrid, balanced advantage, and index funds. This approach allows investors the flexibility to select from a range of products without being confined to specific market caps.

As India's capital markets become increasingly complex, she noted a growing trend among younger investors and high-net-worth individuals (HNIs) to favour sophisticated investment products. "Many believe that now they are wealthy, they no longer need to stick to basics like 'dal chawal' and can opt for more exotic options like sushi. However, they often find that these choices can be overwhelming, leading them back to their foundational diet," she explained.

Gupta advocates for an 80-20 investment strategy, likening it to maintaining a balanced diet. "Just as one cannot entirely avoid dining out without backlash, a portfolio should include both foundational investments and experimental ones. The 80 per cent represents stable, familiar investments, while the 20 per cent allows for exploration," she said.

She further elaborated on her philosophy, suggesting that personalising investments is crucial, just as dietary choices vary among individuals. “For some, a 60-40 equity-debt split may be ideal, while others might prefer a more aggressive 90-10 or even 100 per cent equity approach,” Gupta said.

Gupta's analogy underscores the need for investors to create portfolios that are not only stable and resilient but also adaptable to individual preferences and market conditions.