Kolkata, 5 February 2026: Motilal Oswal Private Wealth (MOPW) has recommended Flexi-Cap Equity and Credit strategies as core portfolio allocations for 2026, citing improving macroeconomic conditions, supportive domestic policies, and strengthening earnings visibility as key drivers for India’s market outlook.
In its latest Alpha Strategist – January 2026 report titled “The Daedalus Way,” the firm emphasised disciplined investing, cautioning investors against both excessive market euphoria and pessimism. The report advocates a balanced, execution-led investment approach focused on valuation-driven asset allocation rather than short-term narratives.
India Outlook Strengthens After Consolidation Phase
According to MOPW, India’s markets are entering 2026 on firmer footing following a consolidation-led 2025. Improving relative valuations, early signs of earnings recovery, domestic policy tailwinds, and the conclusion of key trade agreements are expected to support long-term profit growth.
Budget measures — including manufacturing incentives, services push, logistics upgrades, capex expansion, and asset monetisation — are seen reinforcing structural growth drivers despite potential near-term volatility from higher transaction costs and limited consumption stimulus.
Portfolio Positioning for 2026
The wealth manager recommends positioning large caps and hybrid strategies as portfolio anchors, complemented by staggered exposure to mid- and small-cap equities as sentiment improves.
Indicative Equity Allocation:
- 50% — Large Caps & Hybrids
- 40% — Mid & Small Caps
- 10% — Global Markets
Investors are advised to prefer index-led or hybrid approaches for large caps while adopting active, bottom-up strategies in mid and small caps. Lump-sum investments are suggested in hybrid funds, with SIP/STP routes for pure equity exposure over the next 2–3 months.
Leadership View
Ashish Shanker, MD & CEO, Motilal Oswal Private Wealth, said the transition from global uncertainty to an execution-driven phase marks a key inflection point.
“India enters 2026 on stronger footing with improving valuations, better earnings visibility and supportive policy tailwinds. We favour stability through large caps and hybrid allocations alongside selective accumulation in mid and small caps.”
Sandipan Roy, Director & CIO, noted that after two strong years, markets normalised in 2025 amid geopolitical risks and moderating AI-led capex momentum.
“Key headwinds are easing — valuations have improved, earnings recovery is gaining traction, and currency pressures have stabilised. Domestic policy support and trade agreements are expected to translate more meaningfully into growth.”
Asset Class Outlook & Strategy
1. Equity
- Outlook remains cautiously constructive.
- Large caps offer valuation comfort and earnings visibility.
- Mid & small caps present selective entry opportunities.
- Returns likely to be execution- and stock-selection-driven, not broad-based.
2. Fixed Income
With inflation benign and rate cuts possible, RBI’s stance may remain data-dependent.
Strategy Highlights:
- 45–55% in performing credit & private credit.
- Exposure to InvITs, REITs, and NCDs (3–5 year horizon).
- Tactical allocation to 10–15Y G-Secs at ~6.8–7.2% yields.
- Prefer accrual strategies as core holdings.
3. Commodities (Gold & Silver)
- Gold: Strategic hedge amid fiscal and currency risks; accumulate on dips.
- Silver: Strong industrial demand outlook; consider profit-booking on rallies and staggered buying on corrections.
4. Real Estate
India’s real estate cycle is seen in its mid-phase.
- Commercial realty driven by GCC expansion.
- Residential returns likely in single digits due to low rental yields.
- REITs preferred for diversified exposure and income visibility.
- Suggested allocation: 5–10% of portfolios.
Investment Discipline Key
MOPW advises investors to stay aligned with long-term investment charters, maintain neutral strategic asset allocation, and remain patient through volatility.
