Motilal Oswal Private Wealth Bets Big on Mid and Smallcaps
Motilal Oswal Private Wealth has updated its investment strategy, recommending a more aggressive allocation to mid and smallcaps. In its latest report, 'The Changing Formation', the wealth management firm noted that global market relationships are shifting, with emerging markets no longer being weighed down by a strong US dollar.
The correction in crude oil prices by around 30% has eased inflationary pressures, strengthened India's external account, and pulled domestic bond yields lower. This improvement in valuations has led Motilal Oswal Private Wealth to increase its overweight position on mid and smallcaps to 50%, from 40% earlier.
The firm suggests that investors need a more flexible and actively managed approach to portfolio construction due to shorter economic cycles and faster change in sector leadership. It recommends a portfolio allocation of 40% hybrid or large caps, 50% mid and smallcaps, and 10% global exposure.