For a long time, Indian investors, especially HNIs, have relied on equities and mutual funds to build wealth. And while that approach has served us well, markets today aren’t what they used to be.

As someone who’s spent years advising HNIs and UHNIs, I’ve seen a shift: Returns are no longer just about what you buy, but how you manage risk. That’s where Alternative Investment Funds (AIFs) are changing the game.

Equities: Reliable, But Not Sufficient Anymore

No doubt, equities are still powerful. They offer:

• Liquidity
• Transparency
• Long-term growth
• Dividend income

But let’s be real, equities don’t hedge downside risks well , and in volatile markets, wealth preservation becomes just as important as growth.

My Take on AIFs: Tactical, Not Trendy

I’m not someone who chases fancy financial products. But when you look at how Category III AIFs function, with their long-short strategies, arbitrage plays, and structured risk management; it’s clear they bring something different to the table.

These aren’t just “new-age” products. They’re built for modern market realities.

Why I believe they matter:

• They’re less tied to market direction – you can play both sides
• They use data, pricing inefficiencies, and strategy over sentiment
• They help reduce portfolio correlation – a critical edge for serious investors

The Portfolio I Recommend Today Looks Like This:

• Core Holdings in Equities – Large-caps + growth bets
• Satellite Allocation to AIFs – Especially if you’re comfortable with complexity and seeking alpha
• Real-time Risk Monitoring – Because markets don’t give second chances

Let’s be clear: AIFs aren’t for everyone . They’re not simple, they’re not cheap, and they’re definitely not passive. But for investors who want more control over risk-reward, and have the risk appetite; they’re worth considering.

Final Thought: It’s About Being Proactive, Not Reactive

In today’s environment, relying on traditional tools alone is like trying to win a chess game with just pawns. AIFs aren’t hype, they’re a calculated strategy. One I’ve seen work well for the right kind of investor.

What’s your view? Still all-in on equities, or open to exploring a more layered approach to investing?

Drop your thoughts: I’m always up for a nuanced conversation.

CA. Prakhar Goyal
Investor | Chartered Accountant | Partner, Satyanarayan Goyal & Co.
“Finance isn’t about chasing returns, it’s about staying ahead of risk.”