Sharing the multi asset allocation strategy for this year, the domestic brokerage and Axis Securities in a note said it has maintained its overweight stance on equities, while maintaining its neutral stance on gold. Further, it has suggested having a quality approach for the bonds.
Axis Securities' recommendation on Asset Allocation Strategy -
Equities: “Earlier in 2021 and 2022, the Indian equity market outperformed its global peers by a significant margin, which largely explains India's relative underperformance in Jan'23. Moving into 2023, we believe the Indian equity market will continue to trade at a higher premium to EM counterparts. We maintain our December 2023 Nifty at 20,400 and value it at 20x December 24 earnings. We recommend investors maintaining good liquidity (10%) to utilize market downturns in a phased manner to build positions in quality companies (where earnings visibility is very high) with an investment horizon of 12-18 months Are. ,
The brokerage house has maintained its 'overweight' stance on the equity. Nevertheless, we believe this is the right time to review the portfolio and, if under-allocated, use the equity market downturn to increase allocation to equities.
Gold: Gold has continued its 2022 outperformance in the first month of 2023 as well, owing to softening bond yields in the past few months and weakening dollar index. Based on current macroeconomic developments, gold will remain the preferred asset class until the uncertainties over the Russia-Ukraine conflict subside and it will continue to attract investment as a proven hedge against other asset classes. "We continue our neutral stance on gold and recommend 'Buy-on-dips' strategy. We continue our neutral stance on gold and recommend 'Buy on dips' strategy."
Fixed Income: The rate hike is done to further push interest rates (in line with global rates) to counter inflationary pressures driven by current macroeconomic growth. RBI has also maintained consistency in the policy statement and maintained its focus on removing 'accommodation' in a calibrated manner. Similar to the previous three policies, the February 23 policy was also on the slightly accommodative side due to concerns highlighted on the external sector, in light of reports recommending a quality outlook for some non-AAA risk bonds based on risk appetite. was put.
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