"Given healthy economic and earnings growth, our portfolio will stay overweight on equity." NARAYAN S.A.

"At 35, be aggressive with equity investments as time is on your side: focus on mid-caps and small caps for better returns." GAURAV MASHRUWALA

"There's no escaping equities if you have to beat inflation and not all equity is risky." MANISH SONTHALIA

To help everyday investors craft their power portfolios-instead of merely wringing their hands at missed opportunities as markets soar-money today asked three specialists of the money-making game to work with a hypothetical corpus of Rs 1 crore and divide it between different assets for optimum gains. Here are their roadmaps to riches.

THE MIDDLE-GROUND
NARAYAN S.A., CEO, Kotak Securities

If you're like most of us, you're not ravenous for risk in your investments-even if it means high returns. The middle-ground is what you'd prefer to pursue. It is widely agreed that asset allocation-just how you split your Rs 1 crore corpus-will account for most of the variations in the returns from your portfolio. The allocation pattern is even more important in the current volatile and dynamic environment. Assuming your investment horizon is more than a year, and that you only want to take moderate risks, we will focus on an approach that will help balance the effects of fluctuations as each type of investment responds to market conditions in its unique way:

Debt: 20%

Given the current macro-environment and expected economic growth momentum, we will stay relatively underweight on fixed income products. Our allocation will be focused towards the shorter end of the curve, with fixed maturity plans, short-term plans and liquid funds as the most appropriate debt investment options.

Structured Products: 30%

These are synthetic investment instruments specially created to meet needs that cannot be met with available cash financial instruments. In an environment where asset classes have gone past their earlier historical high levels, we will stay relatively overweight on products that give us the flexibility to manage risk and don't restrict the upside potential.

Equity: 40%

With our expectation of the Indian economy's growing at a rate of over 7.5 per cent, along with a healthy corporate earnings growth between 15 per cent and 18 per cent, we will maintain an overweight position in equity. We'll stay neutral between large-cap and mid-cap stocks and funds. However, while selecting the funds, we need to focus on consistent performers rather than looking at short-term movements. So we recommend funds that have performed well in all market cycles through active investment strategies.

Bullion: 10%

Gold is an excellent holding when it comes to diversification and risk management, given its low correlation with traditional asset classes.

AGE-BASED PLANS
GAURAV MASHRUWALA, FINANCIAL PLANNER

Your age and the responsibilities that go with it will determine just how to allocate-and make the best use of-your Rs 1 crore.

Investor's Age: 35 years
Responsibilities: Home, children's education and marriage, welfare of parents, retirement

Deploy your Rs 1 crore in consonance with your responsibilities. Don't borrow, buy a house with upfront cash: about Rs 40 lakh. Invest the remaining Rs 60 lakh entirely in equity or split it between equity and commercial property. The latter is a good bet as it will fetch interest and provide an income-flow after retirement. Gold is good for young people, provided its cost isn't as high as it is today. Be aggressive with your equity investments since time is on your side: focus on mid-caps and small caps. Throw in sector-specific funds, after picking your sectors.

Investor's Age: 45 years
Responsibilities: Children's education and marriage, welfare of parents, retirement

With your home loan paid off by now, target savings for your children's education and marriage, besides a regular income for your parents. Put Rs 18 lakh into a debt-based product for your children's overseas education. Split another Rs 14 lakh between debt and equity so that it can grow to Rs 25 lakh by the time your children get married. For income for your parents, park Rs 18 lakh in a monthly income plan mutual fund, where the ratio of debt to equity is a safe 80:20. The rest can go into equity to build a corpus for post-retirement life, with 10 per cent set aside for gold.

Investor's Age: 55 years
Responsibilities: Children's marriage, retirement

Many of your major responsibilities have been fulfilled. Put Rs 25 lakh into a pure debt-based product to fund your kids' marriage. The remaining Rs 75 lakh can be invested in real estate and equity to take care of retirement needs. If products like gold exchange traded funds are available, consider investing in them as gold has no connection with either equity or debt. The last step: a systematic transfer plan from the equity schemes into a sovereign guaranteed product like National Savings Certificates or post-office savings schemes.

THE EQUITY TILT
MANISH SONTHALIA, PORTFOLIO MANAGER, MOTILAL OSWAL SECURITIES

Investor's Age: 35 years
Investment Profile: Aggressive, can take high risks

Your Rs 1 crore corpus should largely be split between equity and debt, with a high bias towards the former. While 85 per cent of the money should be allocated to equity, the remaining can go into a floating rate fund or a money market debt mutual fund. However, your portfolio will be different if you're a more cautious, middle-aged investor. The best strategy is to target high beta stocks. These rise faster than the Sensex when the index climbs. Sure, they also fall more than the Sensex in bear markets, but so long as the outlook remains bullish, these beta stocks will give better returns. These stocks range across sectors-primarily mid-cap stocks in high growth businesses. The sectoral split:

20 per cent in engineering
20 per cent in it
15 per cent in banking
10 per cent in auto
15 per cent in commodities
20 per cent in other sectors

Investor's Age: 45 years
Investment Profile: Willing to take medium risks

For an individual with a moderate predilection for risk, a 70:30 split between equity and other asset classes is best. While structuring the portfolio, ensure a mix of sectors with long-term potential, besides securing exposure to different markets, such as commodities. Unlike the case of an aggressive investor, this bouquet of stocks will comprise large-and mid-caps in equal proportion. The equity portfolio will cover the following sectors:

20 per cent in engineering
20 per cent in it
15 per cent in telecom
15 per cent in banking
10 per cent in outsourcing opportunities in pharma and auto components
10 per cent in select metals
10 per cent in other sectors

Investor's Age: 55 years
Investment Profile: Willing to take very low risks

While there is no escaping equities if one has to beat inflation, investment in stocks does not automatically translate into high risk. Even for an investor with a low desire for risk, the equity markets have plenty of options. A 60:40 split between equities and safe instruments is best. Your portfolio will typically comprise defensive sectors like FMCG, it, construction and utilities, which have a proven track record. In terms of volatility, bluechips lose no more than a few percentage points, unlike small or mid-caps where the swing can be much more. The split:

20 per cent in construction
20 per cent in FMCG
20 per cent in it
20 per cent in pharma
20 per cent in utilities

Index