Portfolio Analysis
+ AI Insights
Add all your assets — stocks, MFs, FDs, EPF, gold, real estate, and more. Get an instant diversification score, a visual allocation breakdown, and AI-generated insights on what's working, what's concentrated, and what to fix next.
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Uses Claude Haiku · 5 analyses/day per visitor · Your data is not stored
What is portfolio diversification — and why does it matter?
Diversification is the only "free lunch" in investing. By spreading your money across assets that don't move together — equities, debt, gold, real estate — you reduce the chance that a single bad event (a market crash, a rate hike, a geopolitical shock) destroys a large fraction of your wealth.
A portfolio that is 90% in Indian large-cap equity MFs and 10% in an FD is not diversified even if it holds 20 different funds. The funds all move together. True diversification means covering multiple asset classes, not just multiple names within one class.
For Indian investors, the major asset classes are:
- Indian equity — direct stocks, MFs, ETFs listed on NSE/BSE
- International equity — US/global funds, FOFs, direct US stocks
- Debt — FDs, RDs, bonds, debt MFs
- Gold / silver — Sovereign Gold Bonds, ETFs, digital gold, physical
- Real estate — physical property, REITs, InvITs
- Government savings — PPF, SSY, NSC, KVP
- Retirement corpus — EPF, NPS, VPF, gratuity
- Cash / liquid — savings account, liquid funds, ultra-short FDs
- Alternatives — PMS, AIF, SIF, crypto
How to read your diversification score
This tool computes a 0–100 diversification score using the Herfindahl-Hirschman Index (HHI) as its primary input, then adjusts for:
| Score range | Label | What it means |
|---|---|---|
| 85–100 | Well-diversified | Multiple asset classes, no single dominant position, some international exposure. |
| 70–84 | Reasonably diversified | Good spread but one area could be trimmed or another added. |
| 55–69 | Moderately concentrated | 1–2 asset classes dominate; meaningful volatility if those classes fall. |
| 40–54 | Concentrated | One class is >60% of the portfolio; review urgently. |
| 0–39 | Highly concentrated | Nearly all-in on one asset class; significant tail risk. |
The AI score provided after analysis may differ from the client-side score because the AI weighs factors the formula cannot: your age, risk tolerance, stated goal, and specific combination of assets within each class.
Common portfolio mistakes for Indian investors
- Forgetting EPF as a debt asset. Most salaried employees have a large EPF balance they don't count in their asset allocation. EPF is effectively a fixed-income instrument. Ignoring it can lead to over-allocation to equity on paper.
- Treating all equity MFs as different assets. Holding 10 large-cap MFs is not 10x diversification — it is over-diversification within a single sub-class. The funds move together because they hold the same 50 stocks.
- Zero international exposure. India's equity market is ~3% of world market cap. A portfolio with no international component is a concentrated bet on one country's economy and currency.
- No inflation hedge. Pure financial assets (equity + debt) lose to inflation in periods of high price rises. Gold and real estate historically provide partial protection.
- Illiquidity mismatch. A portfolio heavy in real estate and EPF (where withdrawal is restricted) with no liquid emergency buffer is a risk during job loss or medical emergencies.
Frequently asked questions
What is portfolio diversification?
Portfolio diversification is the practice of spreading investments across multiple asset classes so that a fall in one category does not wipe out the entire portfolio. Different asset classes tend to move independently — gold often rises when equity falls — so combining them reduces overall portfolio volatility without necessarily reducing long-term returns.
Should I include EPF and PPF in my portfolio analysis?
Yes, always. EPF and PPF are significant assets for most Indian salaried employees and are effectively debt-like instruments with tax-free interest. Not counting them can lead to over-allocation to equities and a false sense of an "aggressive" portfolio when the full picture is actually quite conservative.
Is my data stored anywhere?
No. All calculations happen in your browser in real time. When you click "Get AI Analysis", only aggregate data is sent to our analysis service: asset class labels, amounts, and pre-computed metrics. Individual asset names, notes, or identifiers are never sent or stored.
How accurate is the AI analysis?
The AI (Claude Haiku) receives your exact portfolio numbers and concentration metrics, so its observations are specific to your actual allocation — not generic. That said, this is an informational tool, not financial advice. The AI does not know your full financial situation: tax bracket, insurance coverage, liabilities, or liquidity needs. Use the insights as a starting point for a conversation with a SEBI-registered advisor.
What is HHI and why use it for diversification?
The Herfindahl-Hirschman Index (HHI) is a standard concentration measure: it sums the squares of each asset class's share percentage. A portfolio with one asset class at 100% has HHI = 10,000 (maximum concentration). Ten equal classes at 10% each gives HHI = 1,000 (well spread). Regulators use HHI to measure market concentration in mergers. Here it tells us precisely how "lumpy" a portfolio is.
Disclaimer: This tool is for informational and educational purposes only. The AI-generated analysis does not constitute financial advice, investment advice, or a recommendation to buy or sell any security. Past performance of any asset class is not indicative of future results. Consult a SEBI-registered investment advisor before making any investment decisions. Asset allocation rules-of-thumb (100-minus-age, 60-40, etc.) are heuristics, not prescriptions — your actual allocation should reflect your full financial situation.
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