This CEO has no fixed-income investments, and has never done an SIP

The CEO, who oversees ₹1.3 trillion in advisory assets, also said he has never done an SIP in his life. He simply maintains 6-8 months of household expenses in his savings account and puts everything beyond that into equities through lump sum investments.

Shanker spoke to Mint as part of Guru Portfolio, a series in which leaders in the financial services industry share how they manage their money.

Here are some edited excerpts from the interview.

How has your portfolio changed over the past year?

Nothing much has changed. I have 100% of my portfolio in equities, and it’s been like this for nearly 25 years. A bulk of it (roughly 75%) is in Motilal Oswal shares that I got through employee stock ownership plans (Esops). The rest is split between individual stocks, mutual funds and an alternative investment fund (AIF).

I still have a few stocks that I bought back in the late ’90s, including ICICI Bank, Bharti Airtel and Asian Paints. I’ve also invested in various mutual fund schemes in the flexicap and mid-cap space. Apart from schemes run by Motilal Oswal AMC, I also have schemes by other fund houses such as Old Bridge, Helios and WhiteOak.

Also read: India’s young traders are betting on IPOs—and borrowing their way into a crisis

Last year I added a Category 3 AIF, MO Wealth Delphi Equity Fund, to my portfolio. It was launched by our company (MOPW), and I put in the first cheque. It is a feeder fund that invests in boutique funds, which we think are underrated and undiscovered. It comprises roughly 4% of my portfolio.

How do you manage volatility?

Swearing by equities for the past 25 years has worked out well for me. That said, this is not a template that fits all. Everyone is different in their outlook, temperament, and ability to stomach volatility.

I’ve seen my portfolio fall 30-50% at least four times. Once you get used to that, you become immune to volatility. I am a strong believer that if you have good companies or funds in your portfolio, over a long period of time, the predictability of equities is high. Of course, in the short term, one has to be prepared for the vagaries of the market.

What have your portfolio returns been like?

My portfoliohas generated an XIRR of 46% in the past five years, 56% in the past three years, and about 41% over the past year. MOFSL has performed well since 2024, and that's why it has done well. The Motilal Oswal shares I got through Esops are fully vested.

Do you have any international allocation?

At the moment, 100% of my equity holdings are in India. I feel India continues to offer a lot of growth opportunities. I do understand global economics and what’s happening in other markets. However, being in India gives me the ability to understand what’s happening around me far better.

To be sure, I am not averse to having international exposure. We recommend it to many of our clients, and a lot of them do so.

Did you make any mistakes in the past year?

I don’t look at my portfolio from a one-year or six-month perspective. I’ve been an equity investor for the past 25 years and it has delivered handsome returns. I’ve also more or less achieved a corpus that's large enough if I want to retire. Although I don’t plan to retire anytime soon, my needs are taken care of and I can be more aggressive in my investments.

Within my equity portfolio, most regrets are of omission, not commission. There are certain things I had thought of investing in but did not end up pressing the buy button, which ended up performing well. Every investor goes through that. But there are no regret about the things I’ve invested in. For now, I’m very happy with my investments.

What about financial planning for your children?

I have a 17-year-old son, and his financial plan is directly linked to my portfolio. If my corpus is growing, things like a foreign college education should automatically get sorted.

Normally, people forecast the amount they will need at a future date and then do an SIP to reach that goal. In this case, college is an expense that is not so near-term, and my equity-heavy portfolio suits this as it's a long-term goal.

I don’t have a separate account for this goal, but I’ve invested in two funds and mentally marked them as his college funds. My point is that if there is a mother corpus that can pay for all goals in life, there’s not much to worry about.

Do you do SIPs?

I’ve never done an SIP in my life. SIPs bring discipline to investing, but I don’t have a problem with being disciplined. I always maintain 6-8 months of expenses in my savings account. Anything beyond that goes straight to equities through a lump sum.

The only exception is when I have loans. I don’t like them at all. In fact, I had mentioned last time that I live in a rented apartment and haven’t bought a flat. Whenever I get any bonus or salary, I try to get rid of the loans first. Currently, since I have no loans pending, I am investing the surplus into equities – mostly through mutual funds.

Last time, you mentioned that your parents also invest 100% in equities. The market is up now, but how do they react when it falls?

That’s true. My parents and I had an interesting conversation 8-9 years ago regarding their investments. They had a decent corpus, and I recommended going all in on equities. They broke all their fixed deposits and decided to put everything in stocks. It’s worked out well for now. I've told them that if there’s a shortfall, I will cover for them.

Also read: How new BookMyForex card with no ATM, cross-currency fees stacks up

The dividends from stocks are big enough now to fund their monthly expenses. When markets fall, they sometimes ask me about it. But there’s no big reason to worry. I tell them that their stock portfolios have beaten fixed deposits hands down over the past eight years.

What about insurance?

I have both health and life cover. My family as a whole has ₹20 lakh of health cover. I also have ₹5-crore life cover. Over the years, life insurance has gone down a bit as my portfolio has grown in size.

What about retirement?

I feel people should have at least 25 times their annual expenses when they retire. I’ve achieved that number, but don’t plan to retire anytime soon.

Retirement is an old concept. Earlier, most people would go to factories and feel physically tired after a certain age. But in today’s day and age, most of us are work with our brains. If we remain physically and mentally fit, we can continue to work for much longer.

To give you an example, Warren Buffett recently announced he would step down as CEO of Berkshire Hathaway later this year. He’s 94 years old. He took over Berkshire when he was just 34. Even after he steps down as CEO, he’ll continue going to the office regularly.

In a previous edition of Guru Portfolio, you mentioned buying a Mercedes E-Class. Did you treat yourself to anything exciting this year?

My friend and I now co-own Mumbai Mozartt, a team in the Table Tennis Super League. This state-level league was started by the same guys who run the Ultimate Table Tennis League. I’m a big table tennis fan and was a state-level player myself. I decided to buy the Mumbai team to support the sport. This is not really an investment, and I don’t expect much in return. I paid a few lakhs for it.

Also read: Four issues you may face if you switched jobs but did not transfer your PF