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Global Asset Allocation

Why a global sleeve at all?

5 min · For educational purposes only

Indian equity is roughly 3% of global market capitalisation. A 100% domestic portfolio is a 97% concentration bet, however comfortable it feels.

Most Indian retail portfolios are essentially single-country bets. That has worked well historically because Indian equity has compounded strongly. But concentration risk is concentration risk regardless of how comfortable the bet feels in the rear-view mirror.

The institutional consensus globally is that home-country bias is rational up to a point — generally 60–70% of equity in your home market for psychological and tax reasons — but full concentration is irrational. A 20–35% global sleeve is the typical advisor recommendation for an Indian HNI.

What a global sleeve adds

  • Exposure to sectors under-represented in India (tech, pharma at scale, semis)
  • Currency diversification away from a single emerging market currency
  • Access to deeper liquidity in stress events
  • Lower portfolio volatility through imperfect correlation

Key takeaways

  • India is 3% of global markets; 100% domestic is a concentration bet.
  • 20–35% global sleeve is the institutional comfort range.
  • Diversification benefits are sectoral and currency, not just return-seeking.