{"id":11357,"date":"2026-01-13T12:24:21","date_gmt":"2026-01-13T12:24:21","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=11357"},"modified":"2026-01-13T12:24:22","modified_gmt":"2026-01-13T12:24:22","slug":"how-can-one-diversify-their-portfolio-with-nbfc-bonds","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/","title":{"rendered":"How Can One Diversify Their Portfolio With NBFC Bonds?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Are you a dominant equity investor? If yes, it may be time to pause and reflect. Realise that equities may deliver strong long-term growth, but they also move in cycles and react to economic events. If you run an \u201cequity-only portfolio\u201d, you can face sharp value swings and lack predictable income during volatile phases.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Need a solution?<\/span><\/i><span style=\"font-weight: 400;\"> You may prefer investing a portion of your portfolio in <a href=\"https:\/\/goldenpi.com\/collections\/nbfc-bonds\">NBFC bonds<\/a> (based on your risk appetite). Read this article to first learn why NBFC bonds could be ideal for diversification and then see how you can use them in simple steps.\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#Why_Diversify_a_Portfolio_with_NBFC_Bonds\" >Why Diversify a Portfolio with NBFC Bonds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#How_to_Create_a_Diversified_Portfolio_Using_NBFC_Bonds_in_2026\" >How to Create a Diversified Portfolio Using NBFC Bonds in 2026?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#1_Diversify_Across_Types_of_NBFCs\" >1. Diversify Across Types of NBFCs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#2_Use_Credit_Ratings_To_Assess_NBFC_Bond_Quality\" >2. Use Credit Ratings To Assess NBFC Bond Quality<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#3_Diversify_by_Maturity_Dont_Lock_Everything_for_One_Tenure\" >3. Diversify by Maturity (Don\u2019t Lock Everything for One Tenure)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#4_Limit_Exposure_to_Any_Single_Issuer\" >4. Limit Exposure to Any Single Issuer<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#To_Sum_Up_NBFC_Bonds_May_Reduce_Risk_and_Add_Stability_to_a_Portfolio\" >To Sum Up, NBFC Bonds May Reduce Risk and Add Stability to a Portfolio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#NBFC_Bonds_Portfolio_FAQs\" >NBFC Bonds Portfolio FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#Are_NBFC_bonds_less_liquid_than_shares\" >Are NBFC bonds less liquid than shares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#Why_are_NBFC_bonds_considered_safer_than_equities\" >Why are NBFC bonds considered safer than equities?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#Are_NBFC_bond_investments_covered_under_DICGC_insurance\" >Are NBFC bond investments covered under DICGC insurance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#How_can_you_assess_the_NBFC_bond_quality\" >How can you assess the NBFC bond quality?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#What_is_NBFC_bond_laddering\" >What is NBFC bond laddering?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/how-can-one-diversify-their-portfolio-with-nbfc-bonds\/#Disclaimer\" >Disclaimer:<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Why_Diversify_a_Portfolio_with_NBFC_Bonds\"><\/span><strong>Why Diversify a Portfolio with NBFC Bonds?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">You may be a dominant equity investor focused on long-term growth. That makes sense, but realise that equity markets operate in cycles. They respond sharply to changes in:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Interest rates<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Inflation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Global events<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Economic slowdowns<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">As a result, when markets are unstable or going through a downturn:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The value of your investments may fluctuate<br \/>\nand<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You cannot clearly predict how much income or returns you will earn (because equities do not pay regular income)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Thus, your portfolio becomes \u201cuncertain in value\u201d, which increases reliance on market timing for returns. <\/span><i><span style=\"font-weight: 400;\">Okay, and how to solve this?<\/span><\/i><span style=\"font-weight: 400;\"> The addition of debt instruments such as NBFC bonds may address this imbalance by:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Providing a regular income<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cushioning the portfolio during periods of equity market stress<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reducing overdependence on any single asset class<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">When used strategically and in moderation, NBFC bonds can diversify your equity-only portfolio by creating a more balanced mix of growth and stability.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_to_Create_a_Diversified_Portfolio_Using_NBFC_Bonds_in_2026\"><\/span><strong>How to Create a Diversified Portfolio Using NBFC Bonds in 2026?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before adding NBFC bonds to your portfolio, understand what they are! These are debt instruments issued by Non-Banking Finance Companies (NBFCs) to raise money. In return, they pay you a pre-determined interest.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When included in your portfolio, <\/span><i><span style=\"font-weight: 400;\">NBFC bonds could act as a \u201cmiddle ground\u201d.<\/span><\/i><span style=\"font-weight: 400;\"> They can offer higher return potential than FDs, but may carry lower risk than equities. Now, if you are interested in creating an <\/span><span style=\"font-weight: 400;\">NBFC bond portfolio<\/span><span style=\"font-weight: 400;\"> in 2026, you may follow these steps:<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Diversify_Across_Types_of_NBFCs\"><\/span><strong>1. Diversify Across Types of NBFCs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">NBFCs lend money across multiple segments, such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Housing finance (home loans)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Vehicle and MSME lending<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Infrastructure or equipment financing<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Retail consumer lending, and more<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Each of these segments carries a different level of risk. For example, a housing finance company may depend on the real estate market, while a consumer finance NBFC depends on retail demand.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While creating an <\/span><span style=\"font-weight: 400;\">NBFC bonds portfolio<\/span><span style=\"font-weight: 400;\">, you may prefer to spread your bond investments across NBFCs with different lending models. <\/span><i><span style=\"font-weight: 400;\">The advantage?<\/span><\/i><span style=\"font-weight: 400;\"> You can avoid \u201cconcentrating risk\u201d in a single area. Due to this:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Stress in one sector may not impact all your investments<\/span><span style=\"font-weight: 400;\">\u00a0interest income could become more stable<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your debt portfolio can become less vulnerable to economic cycles<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This type of diversification protects you from \u201csector-specific\u201d problems.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Use_Credit_Ratings_To_Assess_NBFC_Bond_Quality\"><\/span><strong>2. Use Credit Ratings To Assess NBFC Bond Quality<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Credit ratings of NBFC bonds (such as AAA, AA, A, BBB, and lower) indicate an NBFC\u2019s ability to repay its debt. These ratings are assigned by credit rating agencies, such as ICRA, India Ratings, and CRISIL, after analysing an NBFC\u2019s financial strength + creditworthiness. The assessment usually includes factors such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company\u2019s asset quality,<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Capital adequacy<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Profitability<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cash flows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Borrowing profile<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Risk management practices, and more<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Based on this analysis, a rating is assigned to indicate the level of credit risk for investors. Usually, a higher rating suggests lower default risk, while a lower rating signals higher risk and demands higher returns as compensation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, to create a diversified <\/span><span style=\"font-weight: 400;\">NBFC bonds portfolio, <\/span><span style=\"font-weight: 400;\">instead of choosing only one type, you may <\/span><i><span style=\"font-weight: 400;\">(strictly as per your risk appetite)<\/span><\/i><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Use higher-rated bonds (AAA or AA) to anchor your portfolio<br \/>\nand<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Allocate a smaller portion to high-yield bonds (A or BBB) for extra income<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This mix allows you to earn better returns while keeping risk under control.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Diversify_by_Maturity_Dont_Lock_Everything_for_One_Tenure\"><\/span><strong>3. Diversify by Maturity (Don\u2019t Lock Everything for One Tenure)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">NBFC bonds are issued for different tenures, ranging from a few months to several years. If all your investments mature at the same time, you face two major problems:\u00a0<\/span><\/p>\n<div class=\"pcrstb-wrap\"><table>\n<thead>\n<tr>\n<th><span style=\"font-weight: 400;\">Issue<\/span><\/th>\n<th><span style=\"font-weight: 400;\">Meaning<\/span><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span style=\"font-weight: 400;\">Reinvestment Risk<\/span><\/td>\n<td><span style=\"font-weight: 400;\">When your bond matures, you may not be able to reinvest the maturity proceeds at the same or a higher interest rate.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Liquidity Pressure<\/span><\/td>\n<td><span style=\"font-weight: 400;\">You require money, but cannot access it because your investment is locked in.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<p><i><span style=\"font-weight: 400;\">Okay, so what\u2019s the solution? <\/span><\/i><span style=\"font-weight: 400;\">You may \u201cladder\u201d your investments by investing in:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Short-term bonds for liquidity<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Medium-term bonds for steady income<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Long-term bonds for higher yields<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Through such a \u201cmaturity diversification\u201d, you may reduce the risk of locking all funds at one interest rate. Also, some money becomes available at regular intervals, which serves your liquidity needs.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Limit_Exposure_to_Any_Single_Issuer\"><\/span><strong>4. Limit Exposure to Any Single Issuer<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><i><span style=\"font-weight: 400;\">This is where many retail investors make mistakes! <\/span><\/i><span style=\"font-weight: 400;\">When you invest a large portion of your money in <a href=\"https:\/\/goldenpi.com\/\">bonds<\/a> issued by a single NBFC, your portfolio becomes exposed to risks specific to that company. Please realise that a particular NBFC may face:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Liquidity stress<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Regulatory action<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rising bad loans<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Funding issues due to market conditions<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Now, when this happens, bond prices can fall, or repayments may get delayed, even if the company was considered strong earlier. <\/span><i><span style=\"font-weight: 400;\">The solution? <\/span><\/i><span style=\"font-weight: 400;\">Don\u2019t put all your debt in one basket. Instead, you may:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Spread investments across bonds issued by different NBFCs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Avoid allocating a large amount to one NBFC (regardless of its rating)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure no single issuer dominates your debt allocation<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This approach limits the impact of a single company\u2019s failure + protects your <\/span><span style=\"font-weight: 400;\">NBFC bonds portfolio<\/span><span style=\"font-weight: 400;\"> from issuer-specific shocks.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"To_Sum_Up_NBFC_Bonds_May_Reduce_Risk_and_Add_Stability_to_a_Portfolio\"><\/span><strong>To Sum Up, NBFC Bonds May Reduce Risk and Add Stability to a Portfolio<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">So now you know the importance of NBFC bonds in your portfolio. They may offer better returns than traditional deposits and carry lower volatility than equities. <\/span><i><span style=\"font-weight: 400;\">But the key is controlled exposure!<\/span><\/i><span style=\"font-weight: 400;\"> As an investor, you may diversify across:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">NBFC types (Housing finance, Retail credit)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Credit ratings (AAA, AA, BBB)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tenures (2, 3, 5 years)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Issuers<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Additionally, NBFC bonds work best when you invest in products that align with your risk appetite + income needs. Always remember that overexposure or chasing high yields can increase risk.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are interested in the<\/span><span style=\"font-weight: 400;\"> bond market &amp; NBFCs<\/span><span style=\"font-weight: 400;\">, you may <\/span><a href=\"https:\/\/goldenpi.com\/corporate-bonds\"><span style=\"font-weight: 400;\">explore the GoldenPi platform<\/span><\/a><span style=\"font-weight: 400;\">. Here, you can access multiple NBFC bond series issued by PSUs and retail corporate houses. Also, all the bonds are listed along with important details such as issuer, coupon rates, maturity dates, credit ratings, and more.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"NBFC_Bonds_Portfolio_FAQs\"><\/span><strong>NBFC Bonds Portfolio FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Are_NBFC_bonds_less_liquid_than_shares\"><\/span><strong>Are NBFC bonds less liquid than shares?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Usually, the trading volumes of listed NBFC bonds are comparatively lower than equity shares. As a result, you may not always find a buyer when you want to sell before maturity, or you may have to accept a lower price. Note that liquidity improves for bonds issued by large and well-known NBFCs and for shorter-tenure bonds.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Why_are_NBFC_bonds_considered_safer_than_equities\"><\/span><strong>Why are NBFC bonds considered safer than equities?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">That\u2019s because NBFC bonds offer pre-determined interest payments and come with a defined maturity date. Also, bond investors rank higher than equity shareholders in the case of financial stress or liquidation.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Are_NBFC_bond_investments_covered_under_DICGC_insurance\"><\/span><strong>Are NBFC bond investments covered under DICGC insurance?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">No, NBFC bonds are not covered under the DICGC (Deposit Insurance and Credit Guarantee Corporation) insurance scheme. DICGC protection applies only to bank deposits such as savings accounts, fixed deposits, and current accounts, up to the current prescribed limit of \u20b95 lakhs (per bank, per depositor).<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_can_you_assess_the_NBFC_bond_quality\"><\/span><strong>How can you assess the NBFC bond quality?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">To assess the <\/span><span style=\"font-weight: 400;\">NBFC bond quality<\/span><span style=\"font-weight: 400;\">, start by checking the credit rating and the rating agency\u2019s rationale. Higher ratings may indicate lower default risk and greater financial strength. Additionally, you should also review the NBFC\u2019s business model, loan book quality, and past repayment record.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_NBFC_bond_laddering\"><\/span><strong>What is NBFC bond laddering?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">NBFC bond laddering is a strategy where you invest in bonds with different maturity dates instead of locking all money into one tenure. For example, you may invest in bonds maturing in one, three, and five years. This makes sure you keep receiving regular cash inflows, which reduces reinvestment risk and limits the impact of interest rate changes.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Disclaimer\"><\/span><strong>Disclaimer:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">This information is for general information purposes only. GoldenPi makes no guarantee on the accuracy of the data provided here; the information displayed is subject to change and is provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. Investments in the debt securities\/ municipal debt securities\/ securitised debt instruments are subject to risks, including delay and\/ or default in payment. Read all the offer-related documents carefully.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bonds or non-convertible debentures (NCDs) are regulated by the Securities and Exchange Board of India and other government authorities. GoldenPi Securities Private Limited is a registered debt broker and acts as a distributor and not as a manufacturer of the product.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you a dominant equity investor? If yes, it may be time to pause and reflect. Realise that equities may deliver strong&hellip;<\/p>\n","protected":false},"author":8,"featured_media":11413,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[24,28,26,25],"tags":[],"class_list":["post-11357","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bond-market","category-strategy","category-investment-guide","category-bond-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Can One Diversify Their Portfolio With NBFC Bonds? - GoldenPi | Blogs<\/title>\n<meta name=\"description\" content=\"How Can One Diversify Their Portfolio With NBFC Bonds?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/goldenpi.com\/blog\/?p=11357\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Can One Diversify Their Portfolio With NBFC Bonds? 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