Choose multi-asset or balanced advantage funds for core allocation: Tata Asset Management CIO-Equities Rahul Singh
Diversified funds dynamically adjust allocations to capitalise on emerging trends and opportunities. Such funds not only mitigate the risks associated with high valuations in any single sector but also position investors that could benefit from the broader economic growth, Rahul Singh, chief investment officer, Equities, Tata Asset Management, tells Saikat Neogi.
One could allocate 40% to balanced advantage or multi-asset funds, 40% to large- and mid-cap funds and value-oriented funds and keep 20% for a mix of small-cap or thematic funds. If you are optimistic about banking, invest in banking and small-cap funds; if healthcare is your pick, then the rest in pharma, healthcare, and small-cap funds. It is important to focus on areas where the economy is thriving. Avoid being overly conservative while keeping an eye on valuations. Make balanced advantage or multi-asset funds your core allocation.
With the Indian economy poised for steady growth, driven by strong domestic demand and favourable government policies, diversified funds may capture opportunities across multiple sectors. This approach not only mitigates the risks associated with high valuations in any single sector but also positions investors that could benefit from the broader economic growth. Moreover, diversified funds managed by experienced fund managers may dynamically adjust allocations to capitalise on emerging trends and opportunities.
From a valuation perspective, large caps may offer better risk-reward at this stage but mid- and small-cap stocks may offer higher growth potential given that the economy is in the midst of an investment cycle recovery. Therefore, one has to take cognizance of individual risk appetite and investment horizon. At this stage
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