Motilal Oswal Private Wealth Recommends Hybrid Investment Approach Amid Global and Domestic Uncertainty

Motilal Oswal Private Wealth (MOPW) has advised investors to adopt a hybrid investment strategy for the first half of 2025, citing anticipated volatility driven by global and domestic events. Factors such as the new U.S. administration’s policies, China’s trade tariff responses, and the upcoming Indian Union budget are expected to create short-term uncertainty. However, as clarity emerges, MOPW predicts a reduction in market volatility in the latter half of the year.

Despite recent GDP slowdown, MOPW remains optimistic about India’s growth trajectory. The firm highlights India’s macroeconomic stability, bolstered by foreign exchange reserves and a regulated twin deficit. MOPW projects improved GDP growth in the second half of the year, with a recovery from the modest performance in Q2 FY25.

Ashish Shanker, MD & CEO of MOPW, noted that equity investors have seen strong returns post-COVID, driven by earnings growth and domestic inflows. However, with the inauguration of a new U.S. president and potential market fatigue, Shanker cautioned against overly optimistic expectations and emphasized the importance of risk management through asset allocation.

MOPW’s outlook for equities remains positive in the medium term, supported by India’s stable economic environment, increasing government spending, and strong domestic investment flows. Despite flat growth expectations for FY25, the firm expects significant corporate earnings growth in FY26 and FY27. It recommends increasing equity allocation through Hybrid Equity-Oriented Funds or a staggered approach, with accelerated deployment in the event of a market correction.

On fixed income, MOPW anticipates stability, advising overweight positions in accrual and high-yield strategies, while remaining neutral on duration. For gold, MOPW maintains a positive outlook due to factors like declining USD share in global reserves and central bank buying. The real estate sector also shows promise, particularly in the commercial segment, with office space vacancies at their lowest since 2020.

Investors are urged to carefully consider market risks and assess their portfolios accordingly.