PPFAS's Thakkar embraces debt: What's driving the portfolio shift?

From 95% equity to cautious diversification: Rajeev Thakkar on rebalancing as valuations rise, retirement nears

- Jash Kriplani

Rajeev Thakkar, the chief investment officer of Parag Parikh Financial Advisory Services (PPFAS Mutual Fund), oversees assets of over ₹1 trillion. Thakkar, 52, has built a solid track record over the years, with Parag Parikh Flexicap Fund becoming the largest fund in its category. Incidentally, this is also the fund that Thakkar uses for his own equity investments. In this interaction with Mint for 'Guru Portfolio series', Thakkar shares how he manages his personal investment portfolio and why his equity allocation has reduced.

How has your personal investing and portfolio evolved over the past five years?

Over the past five years, my portfolio has seen a shift, especially in the last one to two years. We've been cautious as a fund house, largely due to elevated valuations in the market, and this cautious approach reflected in my personal investments as well. Most of my investments over the past 18-24 months have been in hybrid and arbitrage funds. Given my historically high exposure to equities and the fact that I'm in my 50s, I started rebalancing by allocating more to hybrids and arbitrage products.

Why have you taken a cautious investment approach recently?

Given that valuations are elevated, while stocks may deliver slightly better returns than bonds, I have opted for a more balanced approach. Within hybrids, I have allocated to a dynamic asset allocation fund. It also offers a long-term capital gains tax benefit: if the holding period is more than 24 months, capital gains are taxed at a flat 12.5%.

What is your asset allocation?