Equities, bonds, gold: Where to invest this year and how to allocate?
Sharing the multi asset allocation strategy for this year, domestic brokerage and Axis Securities in a note said that it has maintained its ‘Overweight stance on equities whereas continues the Neutral stance on Gold. Further, it has suggested to have a quality approach for bonds.
Axis Securities’ recommendation on asset allocation strategy –
Equity: “Earlier in 2021 and 2022, the Indian equity market had outperformed its global peers by a significant margin, which explains India’s relative underperformance in Jan’23 to a large extent. Going forward in 2023, we believe the Indian equity market will continue to trade at a higher premium to EM peers.. We maintained our December 2023 NIFTY at 20,400 by valuing it at 20x on Dec’24 earnings. We recommend investors maintain good liquidity (10%) to use dips in the market in a phased manner to build a position in quality companies (where the earnings visibility is very high) with an investment horizon of 12-18 months,” the note stated.
The brokerage house has maintained its ‘Overweight’ stance on Equity. Nonetheless, we believe this to be the right time to review the portfolio and use dips in the equity market to increase the allocation to equity if is under-allocated.
Gold: Gold has continued its outperformance of 2022 in the first month of 2023 as well, thanks to the softness in the bond yield and the moderation in the dollar index over the last few months. Based on the current macroeconomic development, gold will continue to be the preferred asset class until uncertainties over the Russia-Ukraine conflict fades and it will continue to attract investments as a proven hedge against other asset classes. “We continue our Neutral stance on Gold and recommend a ‘Buy-on-Dips’ strategy. We continue our Neutral stance on Gold and recommend a ‘Buy-on-Dips’ strategy.”
Fixed income: The rate hike has been undertaken to front-load the interest rates (in line with the global rates) to combat the inflationary pressure, driven by the current macroeconomic developments. The RBI has also maintained consistency in the policy statement and maintained its focus on the removal of ‘accommodation’ in a calibrated manner. Similar to the last three policies, the Feb’23 policy was also slightly on the hawkish side due to concerns highlighted on the external sector, the report highlighted while recommending a Quality approach for bonds with some non-AAA exposure based on risk appetite.
View Full Image
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
Know your inner investor
Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Download The Mint News App to get Daily Market Updates.
