I rebalanced my retirement portfolio twice this year thanks to the bull market

Published: September 26, 2021 at 8:07 am

Last Updated on December 29, 2021 at 6:25 pm

The strong bull market after the March 2020 market crash has been a gamechanger for anyone who had significant equity exposure for the last two years or so. See for example this reader-audit: My net worth doubled in the last financial year thanks to patient investing!

As regular readers may be aware, I had close to 60% equity before the March 2020 stock market crash. After the biggest intraday fall (23rd March 202) the 10-year Nifty SIP Return was 2.3%, 14-year SIP Return, 5%. My retirement equity MF portfolio return plunged to 2.75% after 12 years.

By Dec 2020, the situation was completely different! The 2.75% transformed to 13.2%. It is now a touch above 20% (19th June 2008 to 25th Sep 2021). More importantly, the number that matters the most – what is the corpus worth? – did not go down too much.

In fact, my financial independence status increased from 31X  in Dec 2019 to 33X in March 2020 due to additional investments. Currently, it is about 53X after accounting for a 25% increase in expenses as a buffer.  Here X = current annual expenses and 31X means the corpus can provide an inflation-protected income for about 31 years.

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From about 53-54% in March 2020, the equity allocation shot up to 63% in Dec 2020 and 65% in April 2021 (additional investments into equity MFs and direct equity also played a role). So I rebalanced my retirement portfolio for the first time after 13Y.

From April to September, the equity allocation again increased from 60% to 65% forcing a second rebalance. I have also rebalanced my “son’s future” portfolio twice (the last time I did this was in 2017).

Perhaps I could have avoided this second rebalance by not investing from April but in my book that is the worst investing mistake – waiting for the right time to invest. What about tax? Tax is the peanuts we toss to the govt en route to becoming rich. So it is not a consideration. Asset allocation beats all other factors.

The April rebalance was a shift from equity mutual funds to three PFF accounts (mine, wife and son’s) and ICICI Gilt Fund. See: This useful feature of PPF deserves more attention! And Why I partially switched from ICICI Multi-Asset Fund to ICICI Gilt Fund. This fund is part of both my long-term portfolio held in two folios.

The September rebalance was a shift from equity mutual funds, some stocks held in an old FundsIndia acct to ICICI Gilt Fund.

Why ICICI Gilt fund? 

  • I wanted a debt fund for the long term.
  • A category that has a chance of beating liquid or money market funds
  • minimal credit risk
  • Full liquidity. No lock-ins. Hate lock-ins.
  • My investment tenue is open (I can use this even after retirement)
  • I did not mind active duration calls instead of 10Y constant maturity funds. This will relatively lower volatility and possibly enhance reward from time to time.
  • Since I was already investing in ICICI gilt for my son’s portfolio, the choice was easier. This investment is made in a separate folio for tracking.
  • For a review of the ICICI Gilt fund, see: Why I partially switched from ICICI Multi-Asset Fund to ICICI Gilt Fund.
  • Please note ICICI Gilt fund aggressively changes bond duration. This means the NAV will be volatile (like any other gilt fund). I have 11+ experience with volatile NPS NAVs (including a rare bond crash), and so it was not a difficult choice for me.
  • Please do your own research before investing. If you expect gilt funds to beat PPF every year or every other year, you will be sorely disappointed.

Benefits of goal-based investing:

There is one reason for me to share this: goal-based investing allows us to make investment decisions based on asset allocation and goal-needs only.

There is no need to worry about what the market trend will be in the short-term or the long term. There is no need to follow any investment “expert” (particularly those with the dreaded blue tick). We can invest like clockwork and review the portfolio from time to time to take corrective actions.

The biggest benefit of this approach is the amount of time (= true wealth) we save and the amount of uncertainty we avoid. Those who would like to get started can consider starting here: Basics of portfolio construction: A guide for beginners.

My current retirement portfolio after rebalancing

Pie chart showing the constituents of my retirement portfolio after rebalancing in Sep 2021
Pie chart showing the constituents of my retirement portfolio after rebalancing in Sep 2021

Equity: 59.2%

Debt: 40.8%

  • NPS: 25%
  • PPF*: 6%
  • ICICI Gilt Fund: 8%
  • Cash: (Quantum Liquid Fund + ICICI Arbitrage Fund): 2%

* The PPF allocation is approximate as I have not updated my account for ages (can’t do it online due to SBI id issues)


  • Equity MFs: 20.06% (XIRR; 19th June 2008 to 25th Sep 2021)
  • NPS: 10.12% (XIRR; 8th March 2010 to 18th Sep 2021). Also, see: After 11 years of investing in the NPS (15% equity + 85% bonds) my return is 10%
  • Direct Equity: 35.3% (XIRR including dividends and splits) See: Retirement Stock Portfolio Analysis: September 2021.
  • ICIC Gilt fund is too young to compute returns.
  • PPF: 7.5% should be a reasonable guess? Both PPF accounts will mature in April 2022. Seriously considering opening fresh PPF accounts instead of renewing. It is too small in weight to warrant a visit to the bank every five years and trying to persuade the management to keep renewing it. Not worth my time.
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About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
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