Home Mutual Fund An experiment with Barbell Portfolios

An experiment with Barbell Portfolios

An experiment with Barbell Portfolios


A barbell portfolio has 2 easy elements.

Completely no threat with one a part of the portfolio. All the danger is taken with the opposite half.

Sometimes, a barbell portfolio’s secure half is in govt securities, bonds or Financial institution Fastened Deposits, something that has no default threat.

The opposite half is uncovered to a threat that you’re snug with – direct shares, mutual funds, PMS, non-public fairness, anything you would possibly need to assume.

You additionally get to resolve how a lot to allocate to every half. Most buyers working with this technique, are likely to preserve a couple of years’ price of bills in secure investments, whereas permitting the remainder of the portfolio to construct wealth.

Notice that the core concept of a barbell is to utterly separate the danger in a single bucket. The danger free bucket is for the peace of thoughts, even then the dangerous bucket goes via sturdy volatility, uncertainty, momentary losses.

Some examples of barbell portfolios:

  1. 5 years of bills or extra in Govt sponsored schemes (EPF, PPF, RBI Bonds, and so forth.) and Financial institution Fastened Deposits; Relaxation in Massive fairness utilizing direct shares + mutual funds.
  2. Average Investor – 60% of the investments in Govt / PSU Bonds and 40% in solely giant cap+mid cap dividend paying shares
  3. Fastened Revenue / Bonds – 50% in secure liquid funds, Financial institution FDs, PSU bonds; 50% in Long run bonds. No medium time period.

Barbell, then, additionally doubles up as a behaviour administration instrument for buyers.

Let’s take a few of them up within the upcoming editions of the LightHouse E-newsletter.

Between you and me: How would you do a barbell portfolio? Do share your ideas and feedback.



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