Rule-based multi-asset strategy can be superior alternative to traditional fixed income: Motilal Oswal

In the current volatile market conditions, a rule-based asset strategy which can be alternative to traditional fixed income, Motilal Oswal Private Wealth said.

The advantage of having an equal-weighted portfolio is having a rule-based strategy across asset classes.

According to Motilal Oswal, gold has generated 8 per cent returns (YTD) in INR terms, ASAP 1 per cent and Nifty 2 per cent.

Equity is likely to catch up with gold as global central banks slow down the pace of rate hikes in the remaining part of the year. The returns provided shows the importance of asset allocation in a portfolio.

“The Indian economy & markets are at an inflexion point. A confluence of factors will lead to sustainable growth this decade from Indian equities. The number of UHNW individuals is expected to grow from 6,884 in 2020 to 11,198 by 2025,” said Ashish Shanker, MD & CEO, Motilal Oswal Private Wealth.

Equities are hedged against Gold Funds and Arbitrage funds that provide cushion against any major fall.

While on the upside, the fund enjoys higher returns from Indian and US equities.

The ASAP portfolio from 1990 to 2022 grew at a compounded average growth rate of 11.7 per cent against 9.9 per cent growth of gold, 8.3 per cent growth of debt and 13.8 per cent and 13 per cent growth of Indian and US equities, respectively.

“The ASAP is an all-weather strategy and a superior alternative to fixed income funds,” said Nitin Shanbhag, Head, Investment Products, Motilal Oswal Private Wealth.

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