Kotak Sticks to Overweight Gold Call Despite Cooling Market
Kotak Mahindra Mutual Fund remains overweight on gold in its September 2026 asset-allocation outlook, despite the metal's moderated performance this year. Gold gained 63% between January and December 2025 but has returned just 2% so far in 2026.
The fund house cautions that past performance may not sustain in the future. In its presentation, Kotak notes increased gold buying by central banks, including China's purchases, as well as a correction in US-dollar gold prices from their peak as of August 31.
Kotak's neutral equity stance comes against a mixed valuation picture. The Nifty 50 is trading around its long-term average, while mid- and small-cap stocks are trading at a premium to their respective averages. Corporate profits at 5.2% of GDP in FY26 represent an all-time high according to Motilal Oswal data.
Kotak's portfolio example shows the potential difference between a diversified allocation and an equity-only benchmark. A monthly SIP of ₹10,000 in the 55% Nifty 50 TRI, 30% short-duration debt, and 15% domestic gold combination had a one-year return of 3.98%, compared with -3.01% for the Nifty 50 TRI.