ET Wealth Expo: Saurabh Mukherjea Suggests a Simple 50:50 Portfolio to Diversify Across India and the US
Investors often spend a lot of time trying to guess which stock market will do better next year. Will India keep rising? Will the US bounce back? Saurabh Mukherjea, a well-known fund manager, has a simple answer. Instead of guessing, he suggests splitting your money equally between India and the US.
Speaking at the ET Wealth Expo, Mukherjea recommended a 50:50 portfolio. Half of the money goes into the Nifty 50, which tracks India’s largest listed companies. The other half goes into the S&P 500, which tracks the biggest companies in the US. The idea is to keep the split steady with an annual rebalancing.
What Is a 50:50 Portfolio?
A 50:50 portfolio means you put half your money in one market and half in another. In this case, one half sits in an Indian index fund or exchange-traded fund (ETF) that follows the Nifty 50. The other half sits in a fund that follows the S&P 500.
This is a very simple structure. You do not need to pick individual stocks. You do not need to time the market. You just buy two broad index funds and hold them.
Why Diversify Across Two Markets?
India and the US are very different economies. They grow at different speeds. They react differently to interest rates, oil prices and global events. When one market struggles, the other may hold up better. This is the basic idea behind diversification.
Mukherjea explained that this mix can improve returns relative to risk. In simple terms, you may earn a similar return but with fewer sharp ups and downs. That smoother ride can help investors stay invested during bad times.
The Role of Annual Rebalancing
Markets do not stay balanced on their own. If the US market has a strong year, your US half may grow to 60 percent of your portfolio. If India lags, its share may fall to 40 percent. Rebalancing means selling a little of the winner and adding to the laggard once a year to bring the split back to 50:50.
This sounds simple, but it has a powerful effect. It forces you to book some profits in the market that has done well. It also pushes you to buy more of the market that has fallen. In other words, rebalancing makes you sell high and buy low without trying to predict anything.
Avoiding the Guesswork
Many investors try to move money between markets based on forecasts. This is called market timing. It is very hard to get right, even for professionals. Mukherjea’s approach removes that pressure. You do not need to know which market will outperform. You simply own both and rebalance once a year.
For example, imagine an investor who put half the money in the Nifty 50 and half in the S&P 500 five years ago. If the US did better, the US share would now be larger. A yearly rebalance would trim the US side and top up the India side. This keeps the risk level steady over time.
Things to Keep in Mind
There are a few practical points. First, investing in the US from India may involve currency risk. The rupee-dollar rate can move your returns up or down. Second, check the costs of the funds you choose. Low-cost index funds and ETFs are usually the best fit for this strategy. Third, this is a long-term plan. One year of data tells you very little.
Mukherjea’s message is simple. A 50:50 split between the Nifty 50 and the S&P 500, rebalanced every year, gives investors exposure to two large economies. It reduces the need to predict winners. And it can make the journey smoother for long-term investors.
