Why the Marcellus founder raised his stake in global equities to 40%

Mukherjea's investment strategy balances global and Indian equities amid rising costs and economic disruptions

- Jash Kriplani

Saurabh Mukherjea, founder and chief investment officer of Marcellus Investment Managers, said his portfolio's weight to global equities is at its highest. His allocation to global equities has doubled in the last five years—from 20% to 40%, Mukherjea shared with Mint for the Guru Portfolio series. He also fears that, without careful financial planning, middle-class households may get into a debt trap.

Asset mix Mukherjea has always been an equity-heavy investor, with 90% of his portfolio in equities and 10% in bank fixed deposits for contingencies. "Bank fixed deposits (FDs) account for two years' worth of living expenses," he says.

As far as equities go, 40% of his portfolio is in large-cap Indian equities, 10% is allocated to small-caps through Marcellus Little Champs and 40% exposure to global equities.

The large-cap exposure is equally split through Marcellus Consistent Compounders and the National Pension System (NPS). The global exposure is equally divided between Marcellus Global Compounders and the UK Pension Fund. He says the latter is from the days he started his career in the UK.

Over the past year, Mukherjea's overall portfolio delivered returns of 6%, while over the last five years, Mukherjea claims his portfolio has delivered annualized returns of 18%.

Mukherjea says he shifted from Indian small-caps to global large- and mid-caps around elections last year. "We felt the Indian economy was softening, but Indian small-caps appeared to be trading at expensive valuations. The global large- and mid-caps were available at attractive valuations. The global mid-caps are still large companies with $10-15 billion of market cap," he said. "These are global companies that have been compounding earnings at 15% in dollar terms for the last 40-50 years, which were available at just 13-14 times their earnings."