How to diversify your equity portfolio across market capitalisation with passive funds?

The best passive investment strategy is to invest across market capitalisation if you want your portfolio to benefit, irrespective of which index outperforms.

Are you trying to guess which index will outperform next year? That is a futile exercise as even the best investment experts can't tell you that. The fact is that stock markets are cyclical in nature. Various market segments take turns to outperform each other. This outperformance varies across: a) Market capitalisation: Large, mid, and small-cap indices take turns to outperform each other. b) Sectors: Various sectors such as IT, pharma, financials, auto, oil & gas, etc., take turns to outperform each other. c) Themes: Various themes such as consumption, agriculture, digitisation, commodities, etc., take turns to outperform each other. It is difficult to predict which segment (market capitalisation, sector, or theme) of the market will outperform during which period. So, it...

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