All his equity investments are in publicly listed, open-ended instruments. He avoids sectoral, thematic, or style-based bets. His portfolio comprises 8-10 mutual fund schemes diversified across categories and market capitalizations, left untouched for years to compound tax-free. He has also strategically maxed out Employees Provident Fund (EPF) and Public Provident Fund (PPF) contributions in the past.
In an interview with Mint, Jain shares his investment journey and philosophy. Edited excerpts:
Any lessons from your childhood?
My father was extremely organized with his personal finances. He maintained a file for every financial year, with neatly arranged records going back decades. He updated them methodically every week. When he passed in January 2022, his files were up to date till December 2021.
Another incident had a lasting impact. As a child, I once bought fruit and told the vendor I’d pay later. My father was furious and told me never to borrow. He taught me: “jitni chaadar ho utna hi pair pasaro“—live within your means and avoid leverage.
Tell us about your career and investing journey
I started as a management trainee with ITC Ltd in Kolkata in 2000, then moved to Citi in 2003. In the early years, I had minimal expenses as I lived with my parents, so I had a decent investible surplus. Still, I only began investing in equities in 2005. In hindsight, I should have started earlier.
What is your current portfolio allocation?
It’s split into 63% equity, 35% debt, and 2% cash. Within equity, 82% is in mutual funds and 18% in direct stocks. Most of the debt exposure is in EPF, with some in PPF and Sukanya Samriddhi Yojana for my daughter.
I hold 8-10 actively managed diversified equity mutual funds—no thematic or sectoral funds, as they don’t align with my buy-and-hold strategy. I believe “time in the market” matters more than timing it. I rarely reshuffle my portfolio, and annual churn is less than 5%.
My investing approach is simple, and I avoid hybrid products because I do my own asset allocation.
What are your preferred investments in debt?
A large part of my debt investments are in EPF, with the remaining in PPF. I have let both my EPF and PPF compound over 25 years uninterrupted. The 8.25% tax-free rate of interest in EPF is attractive. I have even maxed out EPF in some years, i.e. contributed 88% of basic to EPF in 2020. These debt investments are all illiquid, but for liquidity purposes I have a large equity buffer.
Have you bought any real estate?
Yes. I bought a house in 2010 in Bengaluru. At that point, rental yield was 6.5% and the home loan interest rate was 8.5%. So, it was an attractive deal. But I sold it along with another house and booked capital loss due to indexation benefit. I used this loss for tax-saving by off-setting gains on some of my equity investments.
In 2021, I bought another property in Mumbai, which I now use as my primary residence. Don’t have any outstanding home loan right now. There is a home loan overdraft (OD) I have kept active, but since I’ve parked the entire principal in the account, for all practical purposes it is paid off.
How has your portfolio performed?
My equity portfolio has delivered 17–18% CAGR over nearly 20 years.
What are your retirement goals?
I plan to retire at 55. I’m currently 48. I am targeting 40-times my annual expenses as retirement cover. I am close to it at present. I am not including my daughter’s education goal in this, which is ongoing right now. I have already provided separately for this. People consider 25-times cover, but that’s not enough for me. I would rather be more conservative on my retirement cover.
Can you share some investment strategies that you have used?
Broadly four things – 1) Disciplined investing – I have invested systematically in equities through SIPs (systematic investment plans) for 20 years now. 2) I generally add more to equities when the stock market dips. I don’t always get it right, but overall this has helped me improve my returns. For example, I added equities when markets corrected during the 2008 global financial crisis and more recently in 2020 amid Covid-19 crash. 3) Staying for the long-term is another strategy that has worked for me. During the global financial crisis, my initial investments tanked, but staying invested and buying further on dips boosted my returns. I stayed put for the long-term and the markets eventually recovered. 4) All through my career, I have had a high savings rate typically in excess of 30%. My focus is on what I can control than the returns.
The biggest learning has been the power of compounding and how it kicks in, in the later years. In my 25-year investing journey, the last five years have seen my portfolio triple.
The other strategy, which is not necessarily related to investing, but I have used is keeping a home overdraft facility. I have not withdrawn anything from it, but I have kept it active, just in case I need it. Will keep it active for a few more years as it acts as an emergency cash pool I can dip into anytime.
What’s your insurance cover?
I have life insurance cover of ₹3 crore, which will continue till I am 60. Apart from this, I have a health cover of ₹50 lakh and super top-up of ₹1 crore. This is over and above the employer health cover.
Are there any other investments you’d like to explore?
Reits (real estate investment trusts) and Invits (infrastructure investment trusts) as the yields seem attractive there and offers significant portfolio diversification. I would also like to increase my global allocation. Invest in equities listed on foreign exchanges as the mutual fund route for foreign equities has largely been closed.
Have you invested in unlisted stocks or made any venture capital investments?
Not yet.
What are your other goals?
My daughter’s education in the UK is ongoing, and I’ve already set aside funds. Later in life, I’d like to travel more.