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Below are Press Note: Alpha Strategist March 2021 - Investment Strategy across Asset Classes By Ashish Shanker, Deputy Managing Director, Motilal Oswal Private Wealth Management

Mumbai, March 30, 2021: As FY21 comes to a close, a great deal of investment opportunities lay in front of us as we embark on our journey into FY22. As per Alpha Strategist report recently launched by Motilal Oswal Private Wealth Management, the recommendation for investors is to increase allocation in equities by investing 50% in lump sum and 50% in a staggered manner over the next 3-6 months in Multicap strategies and select Mid & Small Cap strategies (MFs, PMS, AIF). 

As per their risk profile, investors having the appropriate level of Equity allocation should continue to remain invested and increase allocation if they are lower than desired levels. New investors should accelerate deployment in the event of any sharp correction

For the fixed income asset class, a barbell approach is recommended where ‘Accrual’ should precede ‘Duration’ and the overall portfolio average maturity should be  between 2-5 years with sufficient long term investment horizon according to the investor’s risk return profile. ~75% - 80% of the fixed income portfolio should be biased towards high quality short to medium term (2 – 5 years maturity) accrual strategies with minimum investment horizon of 3 years. Within the above allocation; ~15% - 20% can be allocated towards long maturity and high quality roll down strategies with minimum investment horizon of 5 years.

To enhance the overall portfolio yield, investors with medium to high risk profile can consider 20% – 25% allocation of the overall fixed income portfolio to select credit risk funds, MLDs, NCDS and high yield strategies. For liquidity management or temporary parking, investments can be allocated to Arbitrage/UST (minimum 6 months)/Liquid (less than 3 months) strategies which can be deployed in a staggered manner when opportunities arise.

Gold should be treated predominantly as a hedge against heightened volatility. Investors can participate through Sovereign Gold Bonds, Gold Funds & Digital Gold.

Mr. Ashish Shanker, Deputy Managing Director, Motilal Oswal Private Wealth Management said, “The 3QFY21 corporate earnings results continued the strong momentum from 2QFY21 with much better than expected PAT growth & earnings upgrades. For the Nifty50 companies, as against an expected YoY PAT growth of 7%, the actual growth stood at 22%. This much awaited earnings recovery is likely to provide a strong tailwind for the domestic stock market which is well and truly marching ahead. The Govt's focus on fiscal expansion and Capex spending augurs well for the revival of the long anticipated private investment cycle. Nifty50 FY21 EPS is expected to grow by 15% YoY and 33% YoY for FY22E. The shift from unorganized

to organized sector has only enhanced over the last year. Market leaders within their respective industries are likely to grow stronger and have better pricing power.”

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