5 Cricketing Parallels To Understand Multi Asset Funds Better
Investors India|November 2020
Cricket is the most celebrated sport in India. And with IPL, cricket followers have increased, making it one of the premier sports globally. Drawing a few cricketing parallels to investing - let us try to understand multi asset funds, a little better.
Umang Thaker

Choosing the right mix of players

While different conditions require different combinations of players, an ideal combination which works across conditions is a mix of batsmen, 2-3 all-rounders, bowlers and a wicket keeper. In some formats the limitation of having only 4 international players make it imperative that the choices are made even more carefully. So you may have a squad of 20-25 players – the choice of the playing eleven - against a particular opposition - will make all the difference.

Similarly in investing, choosing across the spectrum of asset classes, in different proportions, helps create a good portfolio. A combination of Domestic Equity, International Equity, Debt, and Gold which could help, with each category playing a different role in the portfolio. Debt helps reduce volatility while equity can generate alpha, international exposure provides geographical diversification and gold plays a hedge against inflation/geo political events; thereby increasing the likelihood of better-riskadjusted returns.

Different conditions, Different bowlers – Different economic conditions, different allocations

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