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Where to invest Rs 10,00,000 this Dussehra? Swarup Mohanty answers

Presenting a special series Moneycontrol asked three market experts a simple question: where to invest Rs 10 lakh right now? Here’s what Swarup Mohanty, chief executive officer of Mirae Asset Global Investments (India) has to say:

October 15, 2021 / 12:51 PM IST

"Higher the sector performance, least the capital allocation", says Swarup Mohanty 

Historically, Dussehra is celebrated as the time when Lord Ram killed Ravana, rescued Sita, and consequently, restored law and order in the world. With the Sensex crossing the magical 60,000 threshold and Nifty soaring beyond 18,000, the market is at fresh record high, seemingly slaying any slump or bearish run. 

Dussehra is a good time to clean up your portfolios, weed out what is not working, and bring in the investments that are right for your financial goals. But high market levels don’t offer much solace to those who have been sitting on the fence. At 60,000, the S&P BSE Sensex looks expensive to many. 

Presenting a special series where Moneycontrol asked three market experts  - Radhika Gupta, Nilesh Shah and Swarup Mohanty - a simple question: where to invest Rs 10 lakh right now? Here’s what Swarup Mohanty, chief executive officer of Mirae Asset Global Investments (India) has to say:

Like any good financial advisor, Swarup Mohanty, chief executive officer of Mirae Asset Global Investment (India) says that the first step to investing is to first ask yourself - why do I want to invest? “9 out of 10 people invest without a financial goal. First, make sure you’ve allocated it a trackable goal so that you can take ahead your asset allocation accordingly. There is no one-size-fits-all investment strategy because goals are deeply personal and differ individually.”

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Are all sectors over-valued?

Mohanty says that there is a method in the madness with which equity markets have gone up, so swiftly since the Covid-19 pandemic broke out. Between the end of January 2020 and mid-March when equity markets hit their all-time lows as Covid-19 worldwide pandemic was declared, Sensex fell -38 percent. But from mid-March 2020 till date, Sensex has had an amazing run; having given a return of 134 percent. The question is: which sectors to pick and which ones to avoid? 

“Higher the category performance in the short run, lower the allocation I would make to it in my portfolio,” says Mohanty. He gives an example of the healthcare sector that gained prominence in the pandemic. “It has formed a crucial part of the ongoing market rally. But on the other hand, take the banking sector. Banking has significance but hasn’t found a place in this market explosion. So, I would buy banking, because there is steam and money left to be made in this space,” says Mohanty. 

Also, read The six most favorite sectors of mutual funds. Are you invested in them?

Want to know where you can invest Rs 10 lakhs this Dussehra? Radhika Gupta answers

Should you buy gold this Dussehra? 

Mohanty chuckles as he recalls his hometown’s fascination with gold. “Where I come from, forget women, men wear gold to the extent that can put Bappi Lahiri to shame”, he says, referring to the legendary Bollywood music director, known for his fascination with wearing gold jewelry, chains, and rings.

Mohanty is not against gold investment but doesn’t recommend holding physical gold. He strongly suggests investing in gold through digital means like gold ETFs and more, considering gold to be a safe hedge against inflation. Gold, he adds, should not be bought as a means to create wealth. He points out, that we create money by allocation and destroy money by over-allocation.

Mohanty recollects that when he got married in 1996, he bought gold “like any dutiful Indian.” Back then, he remembers, gold was around Rs 5,000 per 10 grams. That same year, he says, a new equity mutual fund scheme named Nippon India Growth Fund (NIGF; formerly, Reliance Growth Fund) was launched. Since then, he says, gold has grown nine times. “NIGF grew 100 times”.

Where to invest Rs 10 lakhs this Dussehra? Nilesh Shah answers 

On international exposure

Mohanty also advises investors to invest in international equities

The Indian mutual fund's industry offers many schemes that invest either in individual countries, themes, continents, or regions and even in funds that invest across the globe. As per Morningstar India, there are around 12 funds that track the US markets, two funds track the Greater China region, 10 funds that invest across the globe, five funds that invest just in the emerging markets, and so on. 

Also read: US-focussed mutual funds corner most of the flows into international schemes

“The top 50 stocks of S&P form 40 percent of the world market. The cumulative Indian stock market is simply at 3 percent of this global market. So, how much ever you buy India you are just playing within the 3% of the world market. Hence, diversify your exposure to international equities and make space for the world in your portfolio”, says Mohanty.

Also read: 5 international funds that delivered 18-28% annually over five years
Ira Puranik

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