How Laddering Fixed Income Can Help You Stay Agile in an Uncertain World: Jiraaf's Strategy for FY26

Economic Times

28-05-2025

In a year marked by global uncertainty, fluctuating interest rates, and shifting investor sentiment, building a resilient portfolio is more critical than ever.While equity markets may dominate headlines, fixed income is quietly making a powerful comeback. In this exclusive conversation, Saurav Ghosh, co-founder of Jiraaf, sheds light on why laddering fixed-income instruments could be the smartest strategy for FY26.Offering a blend of stability, predictability, and growth, Ghosh explains how this approach helps investors stay nimble in volatile times—without chasing returns or compromising on liquidity.As more retail investors look beyond traditional fixed deposits, Jiraaf's insights offer a fresh perspective on how to make fixed income work harder and smarter. Edited Excerpts—
Kshitij Anand: Let us start with the basics. As we begin FY26, what should be the key priorities for retail investors when it comes to building a well-balanced portfolio?
Saurav Ghosh: The last few months have been quite volatile. We've seen multiple factors at play—geopolitical uncertainty, macro uncertainties, and trade issues. So, it has been an uncertain world in some sense. For retail investors, regardless of the time period, the goal should remain unchanged. We like to keep things simple. I would say one of the most basic things we need in our portfolio is stability—a steady portfolio that performs well during volatile times.
Second, as a retail investor, I always want to be in control of my money. That means having a portfolio that gives me predictable returns and a sense of cash flow so I can manage my financial goals and expenses effectively.Finally, like all individuals, we are chasing growth. In today's market, inflation is a significant concern. So, we need to ensure that our portfolio can beat inflation over time, allowing our money to grow.So, I would say stability, predictability, and growth are the three pillars a well-balanced financial portfolio should be built on.
Kshitij Anand: Well, in fact, let me also add an anecdote: 'History doesn't repeat itself, but it often rhymes,' a well-known quote by Mark Twain. So, how has the macro environment—interest rates, inflation, and global headwinds—changed the way one should look at asset allocation today? I ask this because we are seeing similar patterns again: interest rates on a downward trajectory, inflation also coming down, and global geopolitical headwinds resurfacing, although things have become a bit more stable. How should we view all this?
Saurav Ghosh: Like you rightly said, we've had several instances over the last 15–20 years. We went through the Financial Crisis and then COVID—two major events. These were periods of extreme volatility, and there's a lot to learn from them. Looking ahead, in terms of asset allocation, first, we need to ensure that our portfolio meets our goals—stability, predictability, and growth, as I mentioned earlier.The second point, where many retail investors often get stuck, is in trying to decide which asset class is good or bad. But there is no asset class that is inherently good or bad. What's important is figuring out the right asset allocation for your specific goals.For example, if your key objective is stability and predictability, then fixed income instruments or FDs are the appropriate asset classes. Gold is a great defensive asset class—when nothing else performs well, gold usually does. We've seen that play out over the last 6–12 months.On the other hand, if you're looking for long-term growth, then equities are a great option.So, from an asset allocation perspective, a well-balanced portfolio should have exposure to all major asset classes. The key is to understand your own risk appetite, define the right asset allocation based on your needs, and then go out and build a strong, diversified portfolio.Watch the livestream below:
Smart Mix: Equity, Bonds, FDs & Gold
Kshitij Anand: In fact, recently there is one trend we have witnessed. I'm sure you would concur that debt funds and bonds are gaining popularity. How should investors approach them versus traditional FDs in FY26? I say this because we've gone through a volatile environment in the equity markets, especially in the last three to four months — a lot of volatility, a lot of uncertainty, possibly due to geopolitical conditions. But yes, as a safe haven, debt funds and bonds have gained considerable popularity around this time. What are your views on that?
Saurav Ghosh: Absolutely. The last one year has shown a lot of retail investors what volatile markets can do to their portfolios. Post-COVID, from 2021 onwards, there was a good three to four-year runway for equity markets. A lot of people made healthy returns on their equity portfolios, and I think they got used to that to some extent. The last six months have made people look at their portfolios in the right way. A good portfolio is not just about chasing returns—it's about being resilient. The volatility of the last 6–12 months has been a wake-up call for a large base of investors.That's where bonds and debt mutual funds have really come into focus. Traditionally, the main asset classes were FDs and equities. The issue with equities is the volatility we've recently seen. The issue with FDs — and what people have now realised — is that they don't beat inflation on a post-tax basis. This means that any money allocated to FDs is actually de-growing over time in real terms. So what do we do? Volatility is a concern, and we want stability and predictability — but if our money is losing value, that's also a problem.That's where bonds and debt mutual funds have gained traction. If you look at a bond offering a 10% yield, even for someone in the 30% tax bracket, the post-tax return is around 7%, which helps beat inflation. People have developed this maturity and understanding today — that having bonds in a portfolio not only provides stability but also offers growth because they beat inflation. It's a fantastic addition to a financial portfolio, and that's why we've seen a lot of traction in the bond investment space over the last 12 months.
Kshitij Anand: Let me also get your perspective on the precious metal—the yellow metal, gold. In fact, it has been a strong performer in the past 12 to 18 months. How do you see its role evolving as part of a diversified portfolio? For three straight years, we've seen significant outperformance, and now people are beginning to understand that gold needs to be a part of the portfolio. The allocation might increase—what are your views on that?
Saurav Ghosh: Historically, gold has been a safe haven—a defensive bet. There's a saying: when things go bad, gold shines brighter—both literally and metaphorically. Over the last 6–12 months, with all the geopolitical tensions and macroeconomic uncertainties, gold has outshone most other asset classes. True to its nature, it's a great defensive bet, and it played that role well recently. It provided the stability that portfolios needed.As I said earlier, every asset class has a role to play. Looking forward, gold will continue to be that defensive, safe haven—something of real value in your portfolio when uncertainty prevails. That said, I believe the typical allocation to gold should be around 10–15%. It's important to remember that gold does not generate yield. While it holds value and is a real asset, it doesn't produce cash flows or meet financial needs on a day-to-day or annual basis.So, when you're looking for stability and predictability, gold is great for stability, but for predictable cash flows, you need to look at corporate bonds or other income-generating assets. Gold will always be the safe haven—it has been in the past and will continue to be in the future. But alongside that, you should look at other asset classes that add different kinds of value to your portfolio.
Kshitij Anand: In fact, now that we are talking about asset allocation, let us say for someone who is starting afresh in this financial year, what could be the ideal allocation mix between equities, bonds, FDs, gold, and maybe for Gen Z, cryptos? I'll leave that up to you.
Saurav Ghosh: Generally, again, any asset allocation is very customised and highly dependent on the risk appetite of each individual, so there is no one-size-fits-all asset allocation that works. But typically, in the financial world, we categorise investors as aggressive, moderate, or risk-averse. Depending on where you are in your financial journey, you will fall into one of these three buckets. So, if you are, for example, a risk-averse or conservative investor, that means you highly value stability, predictability, and capital preservation. If this is your investor persona, then I would say at least 60% should be in fixed income, mostly in higher-rated bonds—your AAA or AA-rated bonds—which offer that stability and focus on capital preservation. FDs can provide some liquidity for your emergency funds, and so on. So, 60% in fixed income, largely bonds with some allocation to FDs. I would still suggest about 20% in gold because, again, as a conservative investor, you place a lot of value on stability. The remaining 20% can be in equities and alternatives like crypto. That's for a conservative investor.For a moderate investor, I'd balance it out a bit more—maybe 50% in gold plus fixed income, which could mean 30–40% fixed income and 10% gold. The remaining 50% could be in equities and alternatives—maybe 30–40% in equities, and 10–20% in private markets, alternate fixed income (i.e., higher-yielding fixed income), crypto, and so on, which can help you generate alpha.And if you are a high-risk investor and your financial journey is otherwise well sorted and you're chasing growth, then I would say go as high as 80% in equities and alternatives, and 20% in fixed income. Because you're chasing growth, that's the kind of asset allocation you can look at.
Kshitij Anand: And how should investors approach dynamic rebalancing between asset classes during the year? Are there any tools or strategies which Jiraaf recommends? If you can help us with that as well.
Saurav Ghosh: That's a very interesting question. Today, we're in an environment where there's a strong fear of missing out—the FOMO phenomenon has really taken hold. The world is uncertain—we don't know how things will change six months down the line. So, everyone highly values optionality. If there's an opportunity six or twelve months from now, I want to be able to take advantage of it—I want to be present for it. So, in some sense, people have become averse to making long-term bets. They don't want to get locked in for 5–10 years because, 'What if a better opportunity comes up a year later?' That's the world we are in. That means being agile and truly dynamic with both asset allocation and investments is crucial. At Jiraaf—especially with fixed income—we help you play this optionality game very effectively. One strategy we recommend to our investors is laddering, which allows for dynamic asset allocation and flexibility.What this means is that you invest in different fixed income products with varied maturities and credit strategies or exposures, from AAA to BBB. So, for instance, you can invest in a six-month paper with a AAA rating, a 12-month paper rated A, and an 18-month paper rated BBB. You can mix and match across these.This ensures that a portion of your capital matures every few months—say, at 6, 12, 18, or 24-month intervals—which gives you the opportunity to reinvest based on market conditions at that point in time. So, if today you believe that interest rates are high and may fall in the future, you might also invest a portion in a 3–5 year asset to lock in those high rates.Each of these investments should represent a certain percentage of your overall asset allocation. By investing across different tenors—6, 12, 18, or 24 months, and even up to five years—you are constantly creating opportunities to reinvest as market conditions evolve. This dynamic asset allocation through laddering, especially within fixed income, is a powerful strategy for investors who want to remain agile and make smart, timely investment decisions.
Kshitij Anand: And let me also get your perspective. In fact, you did mention the laddering approach. So, where do alternative fixed income products fit in today's investment landscape? What kind of returns and risks should investors expect from these instruments? Because you rightly pointed out that one can invest in triple-A and probably go down to triple-B as well. So, I'm sure there is a certain level of risk that one should be aware of—if you can highlight this for investors as well.
Saurav Ghosh: Again, great question. Typically, alternative fixed income comes into play when you're trying to balance growth and stability. A lot of investors, as I said, have a higher risk appetite, so they are chasing growth. When they are chasing growth, it means they are looking for long-term equity returns in the range of 15% or more. But they also want some stability in these uncertain times. That's the sweet spot where alternative fixed-income strategies come in.These are fixed-income categories or opportunities that can deliver anywhere between 12% and 18% returns. So, they almost mimic long-term equity returns in some sense, but because they are fixed income in nature, you get predictable cash flows over your one-, two-, or three-year investment horizon. They balance out equity-like growth with stability and predictability. Obviously, this means you're taking a higher risk compared to FDs or triple-A or double-A rated assets, but for that additional risk, you're getting higher returns.
Kshitij Anand: …high return.
Saurav Ghosh: Yes. Now, it's all about maturity and understanding. People often think that triple-B is highly risky, for example. But a lot of our credit rating agencies have done a ton of work. A BBB rated asset has a probability of default of just 0.8%, which is still very low. As a fixed-income platform, we also curate and select higher-quality assets, so in that sense, the actual probability should be even lower. If you have this understanding, it means that by investing across 10 to 15 opportunities within the fixed income category, you're very well diversified. Over a 5- to 10-year investment period, even if one asset results in some capital loss, you can still ensure that you're generating positive returns on your fixed-income portfolio on a yearly basis.That's the way to think about it. Understand the risks involved, diversify across more opportunities to balance out the risk, and take advantage of the sweet spot: earning equity-like returns with stability and predictability. That's where alternate fixed income comes in.
Kshitij Anand: And can we say that alternate fixed income is for senior citizens as well, or risk-averse investors? What is your advice for getting inflation-beating returns while keeping risk under control?
Saurav Ghosh: I wouldn't recommend alternate fixed income for senior citizens or highly risk-averse investors. For these segments, we need to prioritise capital preservation along with predictability of cash flows. Senior citizens may not have active monthly income, so for their regular household needs or expenses, it's better to look at fixed income assets that offer monthly cash flows, but with greater emphasis on stability.I would say AAA to maybe A rated assets are the sweet spot for senior citizens. These can offer close to 10% or double-digit yields. So, you're still beating inflation, you have monthly income to plan your expenses in the absence of active income, and you're prioritising safety. That would be the right strategy for senior citizen investors.
Kshitij Anand: And let me also get your perspective in terms of what are the common mistakes some investors make while mixing asset classes?
Saurav Ghosh: Again, we see this pretty much on a day-to-day basis. First and foremost, as I said, people often ask questions like, "Are FDs good?", "Are bonds good?", "Is crypto bad?" These are typical queries we get. The first thing to understand is that there's nothing inherently good or bad—every asset class has its place. You need to understand the risks associated with an asset class, what goals it can help you achieve, and then decide how much allocation it should have based on your goals and risk appetite. That's the first thing.A good portfolio is a well-diversified one, which includes all asset categories. This is something retail investors often don't understand very well.The second thing is the importance of liquidity. It's always great to chase returns, and returns usually come from a long-term view. But I've seen a lot of retail investors or Gen-Zs invest 100% in equities. Unfortunately, you also need to plan for your financial goals. If you want to buy a house two years later or a car, you don't know how the equity markets will perform in the next two to three years. So, you need to give a lot of value to having predictability—knowing when your money will be available.And finally, I would mention understanding risk. People often misunderstand or are simply unaware of the risks they're undertaking. I believe a careful understanding of your financial liabilities, your financial needs, and even external obligations outside your family is very important. You need to understand the time horizon for each of those liabilities and then build your financial portfolio accordingly.So, understanding your risk profile, each asset class, and the importance of liquidity is crucial—because everyone is chasing long-term growth, but not everyone plans effectively. These are the three main mistakes I would say retail investors commonly make.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)