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Muhurat Trading 2025: This Diwali, just as we light different types of firecrackers, investors can build a diversified portfolio to spread risk and aim for higher returns.

Financial experts Pankaj Mathpal from Optima Money and certified planner Poonam Rungta suggest creating a “firecracker portfolio” that mixes stable, moderate-growth, high-return, global, and ethical funds.

A strong portfolio starts with stability, like a diya that holds firecrackers. Hybrid and liquid funds form the foundation, offering safety and steady returns.

Funds such as ICICI Prudential Balanced Advantage Fund and WhiteOak Capital Multi-Asset Allocation Fund combine equity and debt to provide moderate growth with low risk.

WhiteOak Multi-Asset Allocation Fund has delivered a 1-year return of 16.22 per cent, helping manage risk while aiming for consistent returns.

Liquid or overnight funds act as a safety net for short-term needs or emergencies. Term insurance, health insurance, PPF, or EPF should also be part of this base to protect your financial future.

For moderate growth, large-cap, mid-cap, and flexi-cap funds are recommended. These funds gradually increase in value, helping investors beat inflation and benefit from compounding.

Mirae Asset Large Cap Fund has provided a 1-year return of 6.84 per cent and a 3-year annualized return of 13.64 per cent, while Parag Parikh Flexi Cap Fund has delivered a 1-year return of 7.66 per cent and a 3-year annualized return of 20.48 per cent.

Large-cap funds focus on stable companies, while mid-cap and flexi-cap funds balance growth and risk. These act like fountain firecrackers, steadily lighting up your portfolio over time.

Investors looking for high returns can consider mid-cap and small-cap funds. Like rockets, these funds offer potential for explosive growth over the long term but with higher volatility.

Motilal Oswal Midcap Fund has given a 1-year return of 4.06 per cent and a 3-year annualized return of 24.92 per cent, and Mirae Asset Small Cap Fund, since its inception in January 2025, has achieved a return of 16.06 per cent.

These are suitable for investors ready to accept short-term ups and downs for long-term gains.

Multi-asset allocation and balanced advantage funds provide diversified exposure across equity, debt, and sometimes gold. They automatically adjust to market conditions, reducing risk while keeping the portfolio dynamic.

ICICI Prudential Balanced Advantage Fund and HDFC Multi-Asset Fund are ideal examples, acting like spinning wheel firecrackers that add balance and variety to your investments.

For adventurous investors, sectoral and thematic funds focus on specific industries or themes like technology, healthcare, or consumption.

Examples include Bajaj Finserv Consumption Fund and ICICI Prudential Thematic Advantage Fund.

These funds can deliver strong returns but require careful timing and monitoring.

Global funds invest in companies worldwide, offering exposure to innovation beyond India.

Motilal Oswal Nasdaq 100 Fund of Fund has delivered a 1-year return of 26.11 per cent and a 3-year annualized return of 38.33 per cent, while Axis Global Innovation Fund has provided a 1-year return of 19.14 per cent and a 3-year annualized return of 25.48 per cent.

Experts suggest keeping a small allocation of around 10 per cent for these high-reward, globally diversified options.

For socially responsible investing, ESG and ethical funds are recommended.

Aditya Birla Sun Life ESG Integration Fund has provided a 1-year return of 8.62 per cent and a 3-year annualized return of 15.08 per cent.

These funds allow investors to grow wealth responsibly without taking excessive risk.

Anubhav Maurya is a Senior Sub-Editor at Zee Business, focusing on the stock market, personal finance, corporate news, and related sectors.

He has previously worked wi