New Delhi: According to Motilal Oswal Private Wealth, investors across the globe should be prepared for market volatility in the medium term, given the geopolitical tensions and the possibility of a downward revision in earnings.
According to Wealth Manager, gold has given 8% return on a year-on-year basis in rupee terms, Alpha Strategist Advantage Portfolio (ASAP) 1% and Nifty 2%.
Wealth managers of corporates/institutions, individuals with high net worth and ultra-high net worth said in a report, “The returns provided reflect the importance of asset allocation in a portfolio.”
To beat the market volatility, Motilal Oswal Private Wealth Management has created an investment proposition called ‘Alpha Strategist Advantage Portfolio’. This includes equally weighted investments in various asset classes such as Indian equities (investing only in passive index funds, 20%), US equities (investing only in S&P 500 index funds 20%), gold (gold funds, 20%), debt Is. (Targeted Maturity Fund, 20%) and Cash (Arbitrage Fund, 20%).
“Investors should avoid major changes in asset allocation that differ from long-term risk-based goals. Given the external risks and their potential impact, investing in a different way can help overcome market extremes,” said the wealth manager.
According to Motilal Oswal Private Wealth, the advantage of having an equally weighted portfolio is a rules-based strategy across all asset classes. Equity is hedged against gold funds and arbitrage funds which provide cushion against any major downside. While on the upside, the fund enjoys higher returns from Indian and American equities.
Ashish Shankar, Managing Director and CEO, Motilal Oswal Private Wealth said, “The Indian economy and markets are at a turning point. A confluence of factors will lead to sustainable growth from Indian equities in this decade. The number of UHNW individuals is expected to increase from 6,884 in 2020 to 11,198 by 2025.”
The ASAP portfolio grew at a compound average growth rate of 11.7% from 1990 to 2022 against 9.9% growth in gold, 8.3% growth in debt, and 13.8% and 13% growth in Indian and US equities, respectively.
The standard deviation of ASAP was seen at 8% in Indian equities, against the standard deviation of 27.4%, 15.1% in US equities, 2.6% in debt, 0.6% in cash and 14.8% in gold. ASAP’s benchmark index is CRISIL Composite which is the standard benchmark for fixed income funds.
Nitin Shanbhag, Head, Investment Products, Motilal Oswal Private Wealth, said, “ASAP is an all-weather strategy and a better alternative to fixed income funds. The rationale behind ASAP is that there is a rule-based exposure across asset classes to remove behavioral bias and generate stable consistent returns over the long term.”
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