ETMarkets Fund Manager Talk: Why does this portfolio manager think the traditional 60:40 asset allocation model will return?
After more than a year of rate-tightening cycle, economies world over are likely to see liquidity conditions ease and interest rates trend lower later in 2024.
In such a scenario, Arindam Mandal, portfolio manager at Marcellus Investment Advisors anticipates a gradual return to the traditional 60/40 model of asset allocation for the average investor, consisting of 60% equities and 40% bonds.
“This allocation strategy endured a challenging period over the past couple of years. Historically, election years have often translated to favorable returns, providing a promising outlook for the calendar year ahead,” Mandal said in an interview with ETMarkets.
For Indian investors, Mandal recommends a 70% allocation to domestic equity and a 30% allocation to global equity, striking a balance between local opportunities and exposure to international markets. Edited excerpts:
Amid the valuation conundrum and geopolitical risks, how should one play the current market momentum?
Arindam Mandal: In the Indian market context, valuations among large-cap stocks appear more reasonable compared to the small and mid-cap segments. Within this landscape, certain high-quality compounders are trading at premiums comparable to levels seen in 2018-19.
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Our approach is to strike a balance within
