Latest news with #AlphaStrategist
Mint
28-05-2025
- Business
- Mint
India VIX: Volatility either behind us or largely priced in; shift focus ‘from events to earnings': MOPW
Domestic brokerage house Motilal Oswal Private Wealth (MOPW), in its May 2025 Alpha Strategist report, noted that the bulk of event-driven volatility—both global and domestic—appears to be behind us or largely priced into the markets. In today's deals, India's fear gauge, the India VIX, has declined over 3 percent to its day's low of 17.91 on Wednesday, May 28. Meanwhile, the Indian benchmarks, Sensex and Nifty were down around 0.28 percent in intra-day deals. Against this backdrop, the firm believes it is now time for investors to shift their focus from macro events to corporate earnings, as early indicators point to improving performance by India Inc. According to MOPW, early Q4 FY25 results signal a healthy corporate earnings trajectory, and the Nifty 50 is expected to deliver a 14 percent CAGR in EPS over the next two years. With large-cap valuations having moved from 'attractive' to 'fair' levels following the recent rally, the firm believes return expectations must be moderated going forward. While mid and small caps are still trading at a premium relative to their long-term historical averages, MOPW acknowledged that selective opportunities are beginning to emerge in these segments as well. The wealth manager stated that India is relatively better positioned compared to global peers, citing macroeconomic indicators such as a declining 10-year G-Sec yield, a relatively stable rupee, contained inflation, and ongoing fiscal discipline. It further highlighted that concerns around economic slowdown are being balanced by positive trends including record-high GST collections in April 2025 (up 12.6 percent YoY), a rising manufacturing PMI, and strong export figures—all of which suggest that economic activity may be picking up pace. Additionally, foreign institutional investor (FII) flows have turned net positive for two consecutive months, indicating renewed investor confidence in the Indian market. In terms of investment strategy, MOPW recommends a lump sum approach for Hybrid, Large Cap, and Flexi Cap funds, given the market's stabilisation and fair valuation zone. On the other hand, for Mid and Small Cap categories, the firm suggests a staggered investment approach over the next 2–3 months, with any market pullback offering an opportunity for more aggressive deployment. In the fixed income space, the wealth manager noted that benign inflation and slowing growth have allowed the RBI to adopt a more accommodative stance, pivoting towards growth support. The 10-year G-Sec yield has remained stable and gradually declined, aided by favourable demand-supply dynamics and RBI interventions such as OMO purchases, term repo auctions, and USD/INR swaps. Given the current yield environment, MOPW believes the steepening of the yield curve makes accrual strategies more attractive, while cautioning that long-term yields are not compelling enough for duration plays. Gold prices touched all-time highs in April 2025, driven by global uncertainties. However, MOPW now considers gold to be overstretched, as some of that uncertainty has started to ease. As a result, the firm maintains a neutral stance on gold from an asset allocation perspective. Motilal Oswal Private Wealth's latest strategy note underscores a paradigm shift in investor focus—from reacting to macro events to riding the wave of corporate earnings. With much of the uncertainty now in the rear-view mirror and India's economic indicators showing resilience, the stage appears set for fundamentals to take charge. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
&w=3840&q=100)
Business Standard
21-04-2025
- Business
- Business Standard
Staggered or lump sum? Here's how to invest in equities this quarter
In its April 2025 Alpha Strategist report, Motilal Oswal Private Wealth (MOPW) has revealed a strong performance by active funds across all major categories during FY25, outpacing their passive counterparts—a reversal of the recent trend that had favored passive investing. The firm expects this outperformance by active strategies to continue through the coming quarters. Neutral stance on equities, strategic deployment recommended MOPW is advising a neutral stance on equities as an asset class, citing current market valuations and volatility. However, the firm recommends a nuanced approach for investors looking to deploy capital. A lump-sum investment strategy is favored for Hybrid Funds, while a staggered investment approach over the next 2–3 months is suggested for Large Cap, Flexi Cap, Mid- and Small-Cap Funds. In the event of a deeper market correction, MOPW suggests accelerating capital deployment to capitalize on improved valuations. Equity Market Valuations: A Mixed Picture The Indian equity market presents a mixed valuation landscape. The 12-month forward P/E of the Nifty-50 is currently 15% below its September 2024 high, and the index trades at a 3% discount to its long-period average (LPA)—indicating more reasonable valuations in large caps. However, mid-cap and small-cap indices continue to trade at elevated levels—26% and 32% above their LPAs, respectively—raising caution around these segments due to relatively higher valuations. "Considering the recent corrections, if Equity allocation is lower than desired levels, investors may increase allocation by implementing a lump sum investment strategy for Hybrid and a staggered approach for Large Cap, Flexi Cap, Mid & Small cap over the next 2-3 months, with accelerated deployment in the event of a meaningful correction," said Motilal Oswal in a note. Fixed Income: Accrual Strategies Take Center Stage On the fixed income front, the RBI's recent rate cuts and liquidity infusions have slightly steepened the yield curve, prompting MOPW to suggest exiting long-duration instruments as the duration trade nears its end. Instead, MOPW recommends an overweight allocation to accrual-based strategies within fixed income portfolios. The firm proposes a diversified approach across: 30%–35% in Performing Credit Strategies, NCDs, and InvITs 20%–25% in Private Credit, including Real Estate and Infrastructure 25%–35% in Arbitrage, Floating Rate, and Absolute Return Long/Short Strategies 20%–25% in Conservative Equity Savings Funds for tax-efficient returns Gold: A Neutral but Stable Portfolio Pillar Gold continues to reaffirm its role as a traditional safe haven amid ongoing global uncertainties. MOPW maintains a neutral allocation stance on gold, emphasizing its historical resilience during turbulent market phases. Recent data shows robust demand for Gold ETFs, with $6 billion (67 tonnes) of net inflows in March from U.S. investors alone, followed by strong interest in Europe and Asia. The trend signals sustained appetite for gold-backed investments.
