Summary
After 12 months of actively investing in fixed income instruments, I’ve decided to step back from hands-on investing—but not for the reasons you might think. Starting with just ₹10,000, my portfolio size grew to over ₹50 lakhs across multiple platforms including bonds, SDLs, invoice discounting, and P2P lending. While the experience has been largely positive with minimal delays and good returns, the time-consuming nature of managing reinvestments at scale led me to transition to a managed approach with a dedicated portfolio manager with Grip.
The Beginning: From ₹10,000 to ₹50 Lakhs
Twelve months ago, I started with what would become an eye-opening journey into India’s fixed income landscape. I started with a modest ₹10,000 & began exploring the various platforms that have emerged to democratize access to alternative fixed income instruments.
In retrospect, I believe I became too comfortable too quickly — my investments increased from ₹10,000 to over ₹50 lakhs in just one year. And I think I was lucky to not have seen any significant delays or defaults in this time. This wasn’t just about the returns; it was about understanding an entirely new asset class that retail investors now have access to, including bonds, SDIs, invoice discounting, and P2p lending.
The Bright Side: Why Fixed Income Makes Sense
1. True Diversification for Retail Investors
For too long, retail investors have been limited to just four main asset classes: equity, fixed deposits, real estate, and gold. Fixed income instruments bridge a crucial gap, offering returns better than traditional FDs while maintaining a level of predictability that volatile assets simply can’t match.
2. Predictability in an Uncertain World
Even assuming these instruments carry similar risks to equity (which platforms dispute), the predictability they offer is invaluable. This predictability transforms financial planning from guesswork into strategic decision-making. When you know what to expect, you can plan better.
3. Perfect Timing for Early Adopters
We’re at a sweet spot in the market’s evolution. These platforms have been operating for 3-4 years, proving their mettle while regulatory bodies are now providing formal recognition and approvals. This combination suggests we’re getting in while returns are still attractive, before the market matures and potentially offers lower yields.
4. Tax Efficiency (For Some)
The taxation structure follows your income slab, which can be a significant advantage for investors in lower tax brackets. If you’re in the 0% or 10% bracket, this becomes a compelling reason to allocate funds here.
The Challenges: What They Don’t Tell You
1. The Risk of the Unknown
Let’s be honest—these are relatively new instruments for retail investors. While institutional players have used them for decades, we’re still learning what can go wrong. The theoretical appeal is strong, but practical risks remain largely unexplored territory for retail participants.
2. The Reinvestment Trap
This was my biggest operational challenge. Fixed income instruments generate regular returns—monthly, quarterly, or annually. Each payment requires a reinvestment decision. As my corpus grew, this became increasingly time-consuming. What started as an interesting side project evolved into a part-time job.
3. Tax Implications at Scale
For investors in the 20%+ tax brackets, the tax treatment becomes less favorable, potentially limiting the optimal allocation to these instruments.
Delays & Defaults: Biggest Scare of Fixed Income
If i had to summarise my 12 months — the results have been surprisingly positive. Delays have been minimal—far fewer than I anticipated. Yes, there have been some issues — (1) Indiap2p & (2) BetterInvest, but my invested sum in these 2 is on the lower side. So, for me it does not matter much, but you can be careful while investing with these.
Even when SEBI took action against platforms like Altgraaf and Tap Invest regarding NCD issuances—repayments for my investments remained on schedule and matured without any hassles.
My Current Strategy: Quality Over Quantity
I’ve transitioned from active exploration to focused management. Most of my fixed income corpus now sits with Grip, utilizing their Portfolio Management Service (PMS)—though they’re not actively promoting this service as it’s still in pilot phase.
While I maintain positions across multiple platforms including Altgraaf, Wint, BetterInvest etc. I’m no longer actively seeking new opportunities or platforms. The relationship with Grip has evolved to where they handle the operational complexity while I focus on strategic allocation.
Key Takeaways for Potential Investors
Consider Fixed Income If:
- You’re seeking diversification beyond traditional retail options
- You value predictable returns for financial planning
- You’re in a lower tax bracket
- You have time to manage regular reinvestments (or access to managed services)
Approach With Caution If:
- You’re in a high tax bracket (20%+)
- You prefer completely hands-off investing
- You’re uncomfortable with relatively new asset classes
- You’re looking for equity-like growth potential
The Bottom Line
My pause in active fixed income investing isn’t a rejection of the asset class—it’s an evolution toward more efficient management. The fundamentals remain strong, the regulatory environment is improving, and the diversification benefits are real.
The key is understanding that successful fixed income investing requires either significant time investment or access to quality management services. For those willing to navigate the operational complexity or partner with the right platform, the opportunities remain compelling.
As the market matures, I expect we’ll see more sophisticated products and better operational frameworks. For now, the early-adopter advantage is real, but it comes with the responsibility of active management.
This reflects my personal experience and shouldn’t be considered investment advice. Your risk appetite, financial situation, and tax implications may differ significantly from mine.