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5 Best Investment Options for Diversified Portfolio

 

Keeping your investments diversified is a strategy to keep your risk limited to any of the securities instruments. Whenever you review your portfolio, you wish to structure it for giving maximum returns even in the crisis period. Since the different class of securities performs differently in various conditions, hence diversification of the portfolio is required.

But, how to achieve a balanced diversified portfolio is the key we are going to give you here in this post. You need to have different types of instruments for a balanced diversified portfolio. I have prepared a list of securities instruments that will give you the maximum yield even in adverse times. All these instruments have different risk levels.

 

Let’s discuss the elements of the portfolio.

 

5 best investment options for Diversified Portfolio


1)SBI NIFTY50:

 

SBI Nifty 50 is an ETF traded on NSE and BSE markets online. It gives you the ease to buy NIFTY stocks all at a time. It could be risky to invest all of your money in ONE stock but NIFTY comprises 50 stocks of different sectors. Even if a stock or a sector performs poorly at a certain time, other stocks’ performance can pull Nifty50 up. Nifty 50 has performed very well over the past 20 years. Also, the stocks covered by Nifty50 may change with time.

 

Depending on the performance of the stocks Nifty changes its constituents. When you invest in NIFTY50 you are investing in all those 50 companies which are a part of it. It might not be possible for you to invest in all those 50 companies. But buying Nifty50 allows you to invest in a unit or a part of the unit of those companies.

 

ETF is an easy way to invest in Indexes. SBI NIFTY 50 is an ETF managed by SBI. You can find it on your trading platform by typing its symbol ‘SETFNIFTY50’. Its value follows the Nifty Index. This investment also gives you liquidity as the trade is in real-time. It is also traded in high volumes hence there will always be trades available and one can easily enter and exit in it.

 
2)Motilal Oswal Nasdaq100 ETF (N100):

 

NASDAQ100 is an index that comprises the top 100 international companies listed on the Nasdaq Stock Exchange. It includes companies like Apple, Microsoft, Google, Facebook, Netflix Inc, etc. The securities included in it are weighted according to market capitalization. Motilal Oswal Nasdaq 100 ETF is an ETF listed in NSE and BSE and its symbol is ‘N100’.

 

If one has to invest in companies like apple inc or google one does not have to go for foreign investments medium. Rather you can buy N100 ETF which follows the NASDAQ100 index. Similar to the above-explained SBI Nifty50 ETF, you have the benefits of investing in a pool of companies, but this time, in International large giants companies.

 

One can expect that these companies are going to perform very well in upcoming times. Even if one company fails, all large giants are not going to fail at the same time. It also has large volumes of trading and in real-time. You can easily enter and exit in this ETF also at any time when the stock market is opened.

 

3)SBI ETF GOLD (SETFGOLD):

 

SBI ETF GOLD is an ETF scheme that invests in Gold and gives returns that are corresponding to the value of gold. Its movement depends on the value of gold. Now Buying gold in a commodity market can also be an option but the MCX futures market always has an expiry date of its contracts. If you are planning to invest in gold for a long term or continuous regular investment in gold, Gold ETF’s are a better option for you.

It can easily be found in trading platforms with the symbol SETFGOLD. It is being managed by SBI hence SBI ETF Gold. However, there are other players available for buying ETF Gold but for choosing a bigger fund house is always advisable when the investment and its return follow a particular commodity.

 

4)ELSS MUTUAL FUNDS:

 

ELSS stands for equity-linked savings scheme. ELSS Mutual funds are those funds that provide you a tax-saving solution. Investment in these mutual funds is eligible for exemption under Section 80C of the Income Tax Act. Also, the investment in these MF’s has a lock-in period of a minimum of three years. This means any of your investments made today can not be withdrawn three years from today.  

 

Also, keep in mind, if you invest in these schemes in SIP mode, each of your installments will get locked for three years from the date of investment.

 

These mutual funds mainly invest in the equity market and their returns are linked to the market performance and the stocks they invest in. There are various mutual fund houses offering ELSS schemes. SBI Long Term Equity fund (previously known as SBI Magnum Tax Gain Scheme) is an ELSS category fund by SBI Mutual Fund. SBI Long term Equity Fund has an asset size of 9267.92 Cr as of 31 March 2021.

 

5)DEBT MUTUAL FUND:

 

Debt Mutual funds are those mutual funds that have their investments in government securities, commercial papers, bonds, etc. The returns in these funds are lower than that of the equity market but also involve less risk. It invests in securities that tend to generate a fixed income and are not usually affected by Market fluctuation. Hence considered a low-risk, fixed income-generating investment.

 

One can expect good returns in debt funds when invested with a long-term vision. Short term goal for this vision can also be completed by investment in FD’s. Debt funds shall give you higher returns than bank FD’s when put in for a longer time. SBI Savings Fund is a debt fund by SBI Mutual Funds. Its asset size is Rs. 20491.89 Cr as of 31 March 2021.

 

Regular and long-term Investments in the above-mentioned instruments will lead you to achieve your financial goal and make you rich. However, your patience to see those returns is a key requirement.

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1 Comments

  1. Very informative and detailed study on the topics which are lesser known and really beneficial

    ReplyDelete