The All Weather Investing smallcase comprises ETFs of three different asset classes–equity (stock market returns), gold and fixed income (bank fixed deposit type returns). This portfolio mix allows the smallcase to steadily generate returns through all types of economic conditions.
The smallcase allocates its portfolio to the three asset classes in a way to get the maximum possible returns while assuming the minimum possible risks. The All Weather Investing smallcase is rebalanced quarterly to stay up to pace with the prevailing economic conditions.
The smallcase is an ideal way to build wealth over the long-term, but should you be investing in it? What type of an investor is all weather investing for? Let’s take a look.
The long-term wealth creator
Most of our investment goals are long-term goals. Be it our own retirement, our children’s education or their wedding, we are usually saving and investing for something that is quite a few years away. If you’re in this same boat, then the All Weather Investing smallcase is ideal for you.
The smallcase takes asset allocation calls in a way to protect your investments and help you build wealth over many years. You won’t see extreme volatility in this smallcase, but you will see steady returns. It is ideal for someone who wants to sit back and not bother about the market’s movements.
The confused beginner
Investing is important, but starting out is difficult. A new investor typically gets overwhelmed by the wide array of investment options available. Fixed deposits are safe but don’t give meaningful returns, mutual funds are difficult to comprehend, stocks come with high volatility. It’s easy for a beginner to get confused or make the wrong choice.
The solution to this quandary is All Weather Investing. The risks associated with this smallcase are relatively less and the investor doesn’t have to worry about asset allocation. This is one investment option that a novice investor can begin with without worrying about taking risks or being concerned about making the wrong choice.
The risk-averse worrier
Despite the increasing knowledge on the benefits of investing in equities, a wide majority of Indians still prefer fixed deposits because they offer capital protection and guaranteed returns. The argument in favour of FDs is that they might not earn a lot, but at least they will not eat into the invested money. But what investors don’t understand is that FDs won’t even help them beat inflation. Money invested in FDs is actually going down in value once inflation is taken into account.
On the other hand, the All Weather Investing smallcase can give stable returns at minimal risks. With investments in both gold and debt, the chances of losing your money in the All Weather Investing smallcase is very less. At the same time, you can easily beat inflation thanks to the equity exposure. All Weather Investing is the best alternative to FDs for the risk-averse investor.
Apart from these, All Weather Investing is also ideal for the cost-savvy investor who doesn’t want to pay ridiculously high commissions to investment advisors and fees to mutual fund companies. There is no initial fee to invest in this smallcase, just a flat Rs 50 fee for additional transactions. This way, the annual cost of investing in All Weather Investing comes to a fraction of the expense ratio and advisory fees of mutual funds.
Overall, the All Weather Investing smallcase is a great investment option for all types of investors. The extent of one’s portfolio that is invested in All Weather Investing would change according to the investor’s profile, but having a certain amount, if not a major part of one’s portfolio, invested in All Weather Investing would definitely be more than useful to build wealth over the long-term.
This video further explains how All Weather Investing is ideal for all types of investors.
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