April 2025 - 9Point Capital

Concentrated vs. Diversified Portfolios: Which Performs Better in Volatile Markets?

Posted on April 29, 2025May 2, 2025 by 9point@admin

The answer, like most things in investing, depends on your goals, risk appetite and time horizon. Let’s explore concentrated vs. diversified portfolios and both the strategies in detail to understand which PMS investment style holds up better when markets turn volatile.

Understanding Concentrated vs Diversified Portfolios

At the core of every investment approach lies a strategic decision: concentrated vs diversified portfolios.

A concentrated portfolio involves investing in a small number of securities, typically 10 to 30, based on deep conviction and rigorous research. In contrast, a diversified portfolio distributes investments across a larger set of securities, sectors, or even geographies, seeking to minimise the impact of individual stock volatility.

Both concentrated and diversified strategies have merit. Choosing between them is not about finding a universally “better” option but selecting the right fit for your investment needs and risk tolerance.

Concentrated Portfolios: Fewer Bets, Higher Potential

Concentrated portfolios can deliver impressive results when executed skillfully. Here’s why they appeal to many seasoned investors:

Focused Expertise: Fund managers allocate capital only to their best ideas, aiming to achieve superior returns.
Higher Upside Potential: A few strong-performing stocks can dramatically lift the overall portfolio’s performance.
Ease of Monitoring: Fewer holdings mean greater ability to track business developments closely.

However, concentration increases portfolio volatility. If even one or two major investments underperform, the entire portfolio can suffer significantly. In volatile times, unless the portfolio consists of resilient, quality companies, concentration can expose investors to sharp drawdowns in terms of price and time.

Diversified Portfolios: Spreading Risk for Steady Growth

Diversification, often described as the only “free lunch” in investing, plays a vital role in mitigating risk. Here’s why diversified portfolios continue to be favoured by many:

Risk Reduction: By spreading investments across sectors and asset classes, diversification cushions against specific stock or sector downturns.
Consistent Returns: Diversified portfolios tend to deliver more stable returns, especially across market cycles.
Protection Against Unpredictability: Unexpected events impacting a single company or sector have a limited effect on a diversified portfolio.

Diversification may reduce the chances of achieving “blockbuster” returns, but it significantly improves the likelihood of meeting long-term wealth creation goals with lower volatility, especially important for those seeking safe investments with high returns in India.

Still, over-diversification can dilute returns. Holding too many low-conviction stocks can reduce the chances of meaningful outperformance, a phenomenon known as “diworsification.”

Volatile Markets: Which Strategy Holds Stronger?

In volatile markets, the choice between concentrated vs diversified portfolios becomes even more critical.

Concentrated Portfolios can outperform dramatically if the chosen investments are resilient and continue to grow despite turbulence. However, they are also more vulnerable to shocks if even one major holding underperforms.
Diversified Portfolios typically weather volatility better. Losses in one sector are balanced by gains elsewhere, leading to smoother portfolio performance overall.

Ultimately, the success of either strategy depends not just on market conditions but on the manager’s ability to select and monitor investments effectively. This is why identifying key performing PMS strategies in India, whether concentrated or diversified, becomes essential when investing through portfolio management services in India.

Key Factors to Consider Before Choosing Your Portfolio

When evaluating PMS investment options, investors should consider:

Risk Tolerance: Aggressive investors with a high-risk appetite may lean toward concentrated strategies. Conservative investors typically prefer diversification.
Investment Horizon: Longer horizons favour concentrated portfolios, as time allows investments to play out. Short-term investors may prefer the stability of diversified portfolios.
Fund Manager Expertise: A skilled manager can make either strategy work. Look for consistency, research strength and performance during past volatile periods.
Financial Goals: Align the strategy with your broader wealth creation, retirement, or income needs.

A Hybrid Approach: The Best of Both Worlds?

Interestingly, some of the top-performing PMS strategies in India blend both philosophies. They maintain concentration in high-conviction themes while ensuring a basic level of diversification to protect against idiosyncratic risks.

9Point Capital specialises in creating customised PMS solutions that combine the best of both worlds, focused high-conviction opportunities alongside strategic diversification. The goal is to deliver safe investments with high returns in India while optimising risk-adjusted performance for the clients.

Conclusion

There’s no universal winner in the concentrated vs. diversified portfolios debate. Concentrated strategies can outperform with conviction and patience, while diversified portfolios offer stability through market cycles.

The right choice depends on your goals, risk appetite, and investment outlook. With expert PMS guidance in India, you can align strategy with purpose.

Ultimately, it’s about optimising risk-adjusted returns. Diversification helps cushion downside risk, while concentration can reward informed conviction. In a volatile world, thoughtful allocation is key to long-term wealth creation.

Goods and Services Tax (GST): Types of GST (CGST, SGST, IGST & UTGST)

Posted on April 22, 2025April 22, 2025 by 9point@admin

In this blog, we break down the types of Goods and Services Tax (GST), explain their applicability and explore the GST rates in India, ensuring you’re well-informed about one of the cornerstones of Indian taxation.

What is Goods and Services Tax (GST)?

The Goods and Services Tax (GST) is an indirect tax that is charged on the supply of goods and services depending on their destination. It aims to eliminate the escalating impact of taxes and establish a uniform national market.

In India, the Central and State Governments impose GST on the same transaction, but it is divided into separate elements. This is known as the dual model. This guarantees a fair split of revenue between the Centre and the States and the preservation of transparency.

Types of GST in India

Here are the types of GST in India you should know:

1. Central Goods and Services Tax (CGST)

Central Goods and Services Tax (CGST) is imposed by the Central Government on intra-state transactions when goods and services are sold within the same state. For example, if a manufacturer in Maharashtra sells goods to a retailer in Maharashtra, CGST is applicable.

The revenue from CGST goes directly to the central exchequer.

2. State Goods and Services Tax (SGST)

State Goods and Services Tax (SGST) is imposed by the State Government on the same intra-state supply of goods and services. Using the above example, SGST will also be levied alongside CGST.

The SGST collected is credited to the respective state government where the transaction occurs.

3. Integrated Goods and Services Tax (IGST)

Integrated Goods and Services Tax (IGST) is charged on inter-state transactions when goods or services move from one state to another or are imported into India.

For instance, if a trader in Delhi sells goods to a buyer in Karnataka, IGST is applicable. It is collected by the Central Government, which later apportions it between the Centre and the destination state.

4. Union Territory Goods and Services Tax (UTGST)

Union Territory Goods and Services Tax (UTGST) is applicable when transactions occur within Union Territories (without a legislature), such as Chandigarh or Lakshadweep.

It works alongside CGST in the same manner as SGST applies with CGST in states.

GST Rates in India and GST Slabs

The GST rates in India are structured into multiple GST slabs to cater to various categories of goods and services:

GST Slab	Description
0%	Essential items like fresh vegetables, milk
3%	Gold
5%	Common use items like packaged food
12%	Processed food, computers
18%	Most services, home appliances
28%	Luxury items and sin goods

These slabs aim to ensure that the taxation burden is equitably distributed based on the necessity and luxury value of goods and services.

How GST is Calculated: An Example

Let’s say you purchase a refrigerator in Mumbai for ₹30,000.

Since this is an intra-state transaction:

CGST @ 9% = ₹2,700
SGST @ 9% = ₹2,700
Total GST = ₹5,400
Final Price = ₹35,400

If the same item is bought from Delhi and delivered to Mumbai, IGST @ 18% = ₹5,400 would be charged instead of CGST + SGST.

Key Benefits of GST in India

The main advantages of GST in India are:

No Double Taxation: GST removes the cascading effect of multiple taxes, reducing the overall tax burden.
Transparent & Simple: A fair structure makes taxation easier to understand and more predictable.
Business-Friendly: Smooth input credit and standardised rules simplify operations across states.
Formal Economy Growth: Encourages businesses to register and comply, reducing the informal sector.
Higher Tax Collection: A broader tax base improves compliance and government revenue.

Final Thoughts

Every business owner, entrepreneur and consumer should know how Goods and Services Tax (GST) functions. India has progressed toward a more transparent, unified and efficient tax system with CGST, SGST, IGST and UTGST constituting the foundation of this system.

GST has set the groundwork for a more structured and growth-oriented economy by removing tax-on-tax, allowing seamless credit flow and harmonising India with world tax standards. Understanding how GST works helps you to remain compliant, maximise expenses and make more intelligent financial choices, whether you run a small business or oversee major operations.

The Role of Asset Management Tokenization in Modern Wealth

Posted on April 14, 2025April 21, 2025 by 9point@admin

Let’s explore how asset management tokenization is revolutionizing modern wealth management and why the future of investment might just be written on the blockchain.

What is Asset Management Tokenization?

Asset management tokenization is the process of transforming ownership rights of tangible assets, including stocks, real estate, financial instruments or even fine art, into digital tokens on a blockchain. These tokens are safe to hold, may be split up into fractional shares and can be traded or transferred instantly between digital platforms.

With asset management tokenization, these procedures are streamlined, guaranteeing quicker execution, increased accessibility, and lower costs than with existing asset management models, which frequently entail middlemen and copious amounts of paperwork.

For example:

Imagine a solar energy farm valued at $8 million being tokenized into 16,000 tokens, each worth $500. Through this model, investors can gain fractional ownership of renewable infrastructure, earning returns from the sale of electricity without needing to manage operations or invest millions upfront.

Why Tokenization Matters in Wealth Management

Here’s why tokenization is becoming essential in modern wealth management:

1. Fractional Ownership and Global Access

Historically, certain asset classes like commercial real estate or fine art have been accessible only to ultra-high-net-worth individuals. With asset management tokenization, these high-value assets can be broken into fractional units, allowing a broader range of investors to participate. It opens the path to global markets, democratising access to premium investments.

2. Increased Liquidity in Traditionally Illiquid Markets

Tokenized assets bring liquidity to asset classes that typically involve long holding periods and limited exit options. Investors can now buy or sell tokenized shares of real estate or private equity much like they would trade stocks, enhancing portfolio flexibility.

3. Reduced Costs and Operational Efficiency

By cutting out intermediaries like custodians, brokers and legal paperwork, tokenized asset platforms reduce transaction costs and operational delays. This gives wealth management companies the ability to offer more cost-effective and faster services to clients.

Tokenized Assets in Blockchain: A Secure Foundation

The security and transparency of tokenized assets in blockchain lie in the core characteristics of blockchain technology: immutability, decentralization and cryptographic security. Every transaction is recorded in a transparent, tamper-proof ledger, increasing trust between stakeholders and drastically reducing fraud.

By incorporating compliance features and smart contracts into tokens, asset management tokenization also guarantees commitment to jurisdictional regulations, which improves the efficiency and reliability of regulatory checks and audit trails.

Adoption of Tokenized Assets in Wealth Management Companies

Top global financial institutions and wealth management companies are already integrating asset management tokenization into their platforms.

J.P. Morgan is piloting tokenized money market funds as part of its Onyx blockchain project.
BlackRock has shown interest in using tokenization to improve transparency in fund management.
Franklin Templeton offers tokenized U.S. government money market funds through blockchain infrastructure.
Fidelity and Apollo are exploring tokenized alternatives to traditional fund structures, enhancing client customisation and real-time reporting.

This change indicates a broader institutional adoption of tokenized finance backed by credible and regulated market participants.

Challenges & Regulatory Outlook

Despite its promise, asset management tokenization faces hurdles such as regulatory uncertainty, standardisation of digital assets and integration with existing financial systems. However, momentum is building.

The European Union’s MiCA law, Singapore’s MAS and the UK’s Financial Conduct Authority (FCA) are all creating frameworks to facilitate tokenized financial assets. The use of tokenization in the investment process is probably going to become commonplace as blockchain technology advances and legal clarity develops.

The Future of Wealth Management is Tokenized

In a world where clients demand transparency, efficiency and global access, asset management tokenization provides a compelling solution. It enables investors to diversify across geographies and asset classes with ease while giving wealth management companies the tools to provide bespoke, tech-driven offerings.

From fractionalised real estate to tokenized private equity funds, tokenization is no longer a concept of the future, it’s already redefining how wealth is managed today.

Final Thoughts

Wealth management and blockchain technology are coming together to create a new era of democratized finance. Smart, effective and inclusive investing methods will rely heavily on asset management tokenization as regulatory backing increases and digital infrastructure strengthens.

The moment has come for modern advising firms and forward-thinking investors to investigate tokenization and its potential contribution to wealth creation in the future.

How to Invest in ETF in India: A Beginner’s Guide

Posted on April 8, 2025April 14, 2025 by 9point@admin

If you’re a beginner wondering where to start, this guide breaks it all down on how to invest in ETFs, which ones to choose and why they may be perfect for your long-term investment goals.

What is an ETF?

An ETF (Exchange-Traded Fund) is a fund that holds a diversified portfolio of assets like stocks, bonds or commodities and trades on stock exchanges like any other equity share. Think of it as a hybrid between a mutual fund and a stock, offering diversification with the flexibility of trading.

Why Invest in ETFs?

When you invest in ETFs, you get:

Low Cost: Minimal expense ratios compared to mutual funds
Diversification: Broad exposure to markets or sectors
Transparency: Daily disclosure of holdings
Liquidity: Can be bought or sold throughout the trading day
Ease of Access: Invest with as little as the price of one ETF unit

These features make ETFs attractive for those looking for safe investments with high returns in India without active fund management.

Types of ETFs in India

Understanding the variety of exchange-traded funds (ETFs) available can help investors build a well-aligned and diversified portfolio. Here’s a concise overview:

Digital Asset ETFs: These provide exposure to regulated digital assets like U.S.-listed Bitcoin ETFs. Ideal for long-term diversification, they can be accessed through India’s GIFT City framework or under the Liberalised Remittance Scheme (LRS).

Index ETFs: Track major benchmark indices such as the Nifty 50 or Sensex. Suitable for investors seeking broad market exposure at a low cost.

Sectoral ETFs: Offer targeted exposure to specific sectors like banking, IT, or pharmaceuticals. Useful for expressing a thematic or tactical view.

Gold ETFs: Backed by physical gold, these are often used as a hedge against inflation and macroeconomic uncertainty.

Debt ETFs: Invest in fixed-income instruments such as government or corporate bonds. Designed for conservative investors seeking stable returns.

International ETFs: Provide access to global indices like the Nasdaq 100 or S&P 500, allowing Indian investors to diversify beyond domestic markets.

Smart Beta ETFs: Combine passive investing with factor-based strategies such as value, momentum, or low volatility to optimise risk-adjusted returns.

How to Invest in ETFs in India

Choose a trusted platform like 9Point Capital to access a wide range of ETFs, including regulated digital asset ETFs such as U.S. listed Bitcoin ETFs. Here’s how to get started:

1. Define Investment Objectives
Start with a one-on-one discussion with our advisory team to define your financial goals, risk profile and investment preferences. This step helps to build a foundation tailored specifically to you.

2. Open an Investment Account
Set up the appropriate account based on investment preferences. This could include:

A domestic brokerage account for Indian-listed ETFs
A GIFT City account for tax-efficient access to global markets
An international account under the Liberalised Remittance Scheme (LRS) for exposure to U.S. listed ETFs, including digital asset options

3. Execute Investments Securely
Begin allocating funds into carefully selected ETFs via regulated platforms like 9Point Capital. Experience smooth execution backed by compliance, transparency and institutional-grade security.

ETF vs Mutual Fund: A Quick Comparison

Here is the vital difference between ETFs and mutual funds:

Feature	ETFs	Mutual Funds
Trading	Real-time	End-of-day NAV
Expense Ratio	Low	Moderate
Minimum Investment	Price of 1 unit (as low as 10rs)	Usually ₹100–₹5,000
Liquidity	High	Moderate
Transparency	Daily holdings	Monthly/quarterly holdings

If you prefer control, low cost and flexibility, invest in ETFs.

Common Mistakes to Avoid

Ignoring ETF liquidity
Overweighting one sector or theme
Not reviewing tracking error
Investing without a long-term view
Misunderstanding ETF taxation

Are ETFs Safe Investments with High Returns in India?

ETFs that track indices like Nifty 50 or Sensex and also digital assets like Bitcoin, Ethereum are considered relatively safe and historically provide 10–12% annualised returns over time. While all market instruments carry some risk, ETFs offer a balanced approach to building wealth, making them attractive investment plans with high returns for risk-aware investors.
Read more: How to safeguard your portfolio with ETFs

ETF Taxation in India

Here is the breakdown of various ETF taxation in India:

Type of ETF	Holding Period	Tax Treatment
Digital Asset ETFs (Bitcoin ETFs)	Less than 3 years	Taxed as per individual income tax slab
	More than 3 years	12.5% Long-Term Capital Gains (LTCG) with indexation
	TCS (LRS)	20% Tax Collected at Source on remittances above ₹10 lakh (claima)
	TDS	Not applicable (unlike direct crypto investments)
	Access	Via LRS through GIFT City–based platforms
Equity ETFs	Less than 1 year	20% Short-Term Capital Gains (STCG)
Equity ETFs	More than 1 year	12.5% LTCG with Exemption for gains of up to Rs.1.25 lacs.
Debt ETFs	Less than 3 years	Taxed as per individual income tax slab
Debt ETFs	More than 3 years	Taxed as per individual income tax slab
Gold ETFs	Less than 3 years	Taxed as per individual income tax slab
Gold ETFs	More than 3 years	12.5% LTCG with indexation

Conclusion: Should You Invest in ETFs?

If you’re seeking transparency, low cost, liquidity and exposure to market indices, invest in ETFs. They’re ideal for beginners and experienced investors looking to create a reliable, diversified investment plan with high returns. In an ever-evolving financial landscape, ETFs stand out as a brilliant tool for long-term investment success. Digital assets like Bitcoin ETF hit the sweet spot for long-term, disciplined investing with liquidity. Reach out to 9Point Capital to explore curated portfolios, GIFT City investment options and a global access platform.