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A rule-based multi-asset strategy can be superior alternative to traditional fixed income: Motilal Oswal Private Wealth

Mumbai 24-Aug-2022

A rule-basedmulti-asset strategy can be superior alternative to traditional fixed income: Motilal Oswal Private Wealth

Ø  Nifty 50 EPS is expected to be more than double from 465 in FY20 to 997by FY24

Ø  Expect household savings to increase 4x, discretionary spend to rise by10x by 2030

Ø  Gold has generated 8% returns (YTD) in INR terms, ASAP 1% and Nifty 2%

Ø  India economy to grow to $6 trillion by FY30


Mumbai, 23 Aug 2022: MotilalOswal Private Wealth held a media webinar on Asset allocation and trends inWealth Management business. According to MOPW, Gold has generated 8% returns (YTD) in INR terms, ASAP 1%and Nifty 2%. Equity is likely to catch up with gold as global central banksslow down the pace of rate hikes in the remaining part of the year. The returnsprovided shows the importance of asset allocation in a portfolio.


Asper MOPW, investors globally can expect market volatility in the mediumterm given the heightened geopolitical tensions and the potential for downwardearnings revisions. Investors should avoid big changes to asset allocationsthat differ from long-term risk-based targets. Given the external risks andtheir potential impact, investing in a staggered manner may help iron outmarket extremes.


AshishShanker, MD & CEO, Motilal Oswal Private Wealth said, “The Indian economy& markets are at an inflexion point. A confluence of factors will lead tosustainable growth this decade from Indian equities. The number of UHNWindividuals is expected to grow from 6,884 in 2020 to 11,198 by 2025.“


Alpha Strategist Advantage Portfolio (ASAP)


As global central banksunwind their easy monetary policy, markets worldwide are expected to witnesshigh volatility. To beat the market volatility, Motilal Oswal Private WealthManagement has curated an investment proposition named ‘Alpha Strategist Advantage Portfolio’. It comprises ofequal weighted investment in different asset classes like -

·      IndianEquities (investing only in the passive index funds) (20%)

·      USEquities (investing only in S&P 500 index funds) (20%)

·      Gold(Gold fund) (20%)

·      Debt(Target Maturity Funds) (20%)

·      Cash(Arbitrage funds) (20%)

The advantage of having an equal-weighted portfolio is havinga rule-based strategy across asset classes. Equities are hedged against GoldFunds and Arbitrage funds that provide cushion against any major fall. While onthe upside, the fund enjoys higher returns from Indian and US equities.

The ASAP portfolio from 1990 to 2022 grew at a compoundedaverage growth rate of 11.7% against 9.9% growth of Gold, 8.3% growth of Debtand 13.8% and 13% growth of Indian and US Equities respectively.

 ·      Thestandard deviation of the ASAP was observed to be at 8% against a standarddeviation of 27.4% in Indian Equities, 15.1% in US Equities, 2.6% in Debt, 0.6%in Cash, and 14.8% in Gold. The benchmark index of ASAP is Crisil Compositewhich is the standard benchmark of the Fixed Income funds.

·      TheASAP on absolute terms for the period ended 31st July 2022, hasgiven 3.1% returns against 1.7% returns of the Crisil Composite Index.

The ASAP portfolio is rebalanced annually at the end ofthe calendar year in such a way that all asset classes have an equal weightageat the beginning of the corresponding next year. Profits from the topperforming asset classes are distributed in the non-performing asset class.


Mr. Nitin Shanbhag, Head – InvestmentProducts, Motilal Oswal Private Wealth said, “The ASAP is an all-weatherstrategy and a superior alternative to fixed income funds. The rationale behindASAP is to have a rule-based exposure across asset classes to take awaybehavioural biases and generate steady consistent returns over the long term.”


About Motilal Oswal Private Wealth


Motilal Oswal Private Wealth(MOPW) is a part of Motilal Oswal Group – a brand that is trusted for knowledgebased investing with a proven performance track record over 35 years. MOPW wasinstituted in year 2007 to cater Corporates/ Institutions, High Net Worth andUltra High Net worth Individuals. We use knowledge to identify the right mix ofFund Managers across asset classes to ensure that you have winning portfolio.“The more we know, the more you win” hence our wealth managers are empoweredwith the science and art of investing. In addition to these, you alsoexperience new insights and ideas on wealth creation through our exclusiveknowledge events. As of June 2022, we manage the wealth needs of over 4800 HNIfamilies through a 200+ member team across 10 cities with assets under advisoryof over Rs. 34,436 Crore.*


For further details contact:

Rohini Kute

Head, Corporate Communication,

Motilal Oswal Financial Services

Mail: rohini.kute@motilaloswal.com