Why Scripbox’s Risk-Taking CEO Follows Asset Allocation Principles
Atul Shinghal, founder and CEO of Scripbox – a digital wealth management platform – said he was an equity-focused investor but did not venture into direct equity investments. “I firmly believe that we have to trust the professionals. My portfolio reflects Scripbox’s fund recommendations,” he added.
Scripbox’s algorithms construct portfolios, typically, by selecting a combination of large and mid-cap funds with consistent long-term performance history, with a greater emphasis on recent performance history. For the debt portfolio, according to Scripbox, the algorithm selects funds that consistently outperform the CCIL Broad TRI Index, an index that tracks the top 20 Indian government bonds traded by volume and number. of transactions.
Shinghal shared his portfolio details for the special annual Mint – Guru Portfolio Series, which began in 2020, to understand the impact of the pandemic on the personal investment portfolios of leaders in the financial services industry.
The series looks at how respondents’ investments have fared, changes to their portfolios, and the investing lessons they have for investors.
Asset class views
Shinghal holds approximately 60% of the portfolio’s exposure to equities. He believes stocks help fight inflation and create long-term wealth. A 10% of the stock portfolio is invested abroad for diversification. He also considers this international exposure as a hedge against the fluctuation/depreciation of the dollar to achieve his future financial objective.
“My daughter wants to study abroad, so overseas investments help hedge the dollar,” he added.
Although Shinghal has a 20% allocation to real estate (in the form of properties), he does not believe in it as an asset class given the cost of buying and selling property and its nature illiquid.
He also does not believe in including the home in equity, saying it is not an appreciating asset that can be used for emergency purposes or to generate yields. But it is positive on new emerging asset classes that are related to real estate (eg REITs).
Regarding his angel investments, he said, “As I am an entrepreneur, I support entrepreneurs. So I have angel investments.”
Shinghal strongly believes in putting his asset allocation principles into practice.
First, he identified himself as a high-risk investor based on risk profiling. Additionally, he identified his financial goals such as retirement and his daughter’s education.
Based on the investment horizon available for each objective, the asset allocation of the portfolio has been determined, which is reviewed every year according to needs.
For example, he said he recently shifted some equity investments to a fixed income portfolio to meet his daughter’s educational requirements that will come in the next few years. Since Shinghal is exposed to angel investing, we asked him what his advice would be for someone who also wants to invest in start-ups.
For that, he says, “If the advisor or financial wealth manager says that part of their portfolio can be allocated to riskier assets, that’s fine. But, I believe, it should not be more than 10%. Before investing, you must ensure that your financial objectives such as retirement and the education of children are well assured.
He also said that individuals are better off using angel investment platforms while investing in start-ups.
He added that “as an individual, it is unlikely in most cases that the investor will be able to have a full understanding of the start-up, the entrepreneur and what they are doing. So it’s better to find a platform that can do the due diligence.”
(Note to readers: Through this series, we attempt to highlight the basics of personal finance such as asset allocation, diversification, and rebalancing. We do not suggest replicating Shinghal’s asset allocation, as personal finances are specific to each individual and differ from person to person.)