I was just 15 when I read the most complex book ever; The Theory of Investment Value by John Burr Williams.” That, perhaps, explains why. Prateek Oswali Motilal Oswal is the Head of Passive Fund Business at Asset Management Company Limited. But, where it pertains to investment strategy, they like to keep it simple: invest and forget. Oswal, who is also the CEO of Glide Invest, shared his portfolio details and investment style for the exclusive Mint Series – Guru Portfolio.
As one investor, he identifies himself as a minimalist, which is quite evident in his portfolio. “I, essentially, invest almost 100% of my savings in equities, and it is mostly in a large equity fund that has been running for the past several years,” he said. Oswal disclosed that his equity fund is on the active side, as the fund house did not have a major passive business at that time.
In the financial services industry, where most experts are exposed to debt, commodities and real estate, Oswal can be considered an outlier. He replied that his high tolerance for risk and non-tolerance of complexity led him to create a portfolio that is based on just one asset. However, he does not advise investors to follow suit. “Most people may not have the kind of risk tolerance I have. I would definitely recommend Asset Allocation to every investor.”
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Oswal says his idea of avoiding complexity has a lot to do with his family, especially his father Motilal Oswal, founder and chairman and managing director of Motilal Oswal Financial Services Ltd.
“Growing up, the first money lesson I learned was the importance of being frugal. Also, I consider myself fortunate to have been introduced to the concept of long-term investing, when I was 13-14 years old.”
Although Oswal says he wants to stick with the one-asset strategy, his portfolio has a small amount of exposure to alternative assets, which he calls his “legacy investment.” They have small investments in crypto assets, and international stocks and funds.
“I was working in San Francisco in 2016, and a friend of mine was at Coinbase. Since I was looking to apply for a job there, I thought investing in crypto would help impress recruiters. Unexpectedly From now on, it didn’t work. However, after that, I never bought crypto. Besides, I still don’t fully understand it and therefore stay away from it.” As with crypto, international stocks and funds make up less than 0.5% of their overall portfolio.
Oswal believes that asset allocation is what drives investment returns – this strategy has given good returns over a long period of time. Their returns have been largely flat over the past year.
Oswal is “super bullish” on India and does not want to diversify the portfolio. However, he would like to explore startup investments in the future.
Oswal has no emergency fund and invests whatever extra cash he gets. “Whenever my savings account exceeds a certain limit, the excess amount is automatically transferred to my mutual fund portfolio. I really don’t have a lot of cash and have always been into equities.”
Oswal loves to read books, a hobby he picked up from his father. He has just finished reading Antifragile: Things That Gain From Disorder.
Wealth for him means better access to smart people who have a lot more knowledge than you.
“If you’re walking 50 crore fund, you will probably get access to an analyst of a big bank, whereas a 500 crore fund will get you in touch with the research head. but if you’re the one 5,000 crore fund, you talk directly to the CEO. I think it’s a big advantage of money. And that’s what drives me to create more wealth and create more wealth for investors.”