Are you worried about the ongoing volatility in the domestic equity market? ICICI Securities shared a few tips on equity, debt and gold to help investors tide over 2023. The brokerage in its latest report said that any correction in Nifty to around 17,000 levels can be used to deploy lump sum across market caps and themes like the banking and infrastructure sector. The benchmark equity index BSE Sensex traded 0.78 per cent down at 17,277.40 in the afternoon trade on March 13. On a year-to-date basis, the index has declined nearly 4 per cent to date.
The 50-share index witnessed a fall for the third straight month in a row in February due to concerns of continued monetary tightening by major central banks, sticky inflation numbers and ongoing war between Russia and Ukraine.
ICICI Securities said that investors can increase SIP allocation in the current round of correction and continue to allocate funds to multi or flexi-cap and dynamic asset allocation funds.
While sharing its strategy with debt investors, the brokerage added that the investment in target maturity 2028 index funds which invest in gilts and SDLs are suitable for investors who have a 5-year time horizon. “Investors with higher risk appetite who want to play peaking interest rate cycle with 4-5 years horizon can invest in dynamic bond or gilt funds with 60 per cent allocation at current G-Sec levels and balance in April or when 10-year G-Sec yield touches 7.50-7.55 per cent levels,” ICICI Securities said in a report adding the entire liquidity earmarked for fixed income allocation can be deployed at this stage to lock in the current yields of 7.50-7.75 per cent.
ICICI Securities also advised investors to invest 5 per cent of the amount in Sovereign Gold Bonds and 5 per cent tactical allocation in ETFs. “We continue to remain cautiously bullish on gold from medium to long term perspective, despite short term underperformance,” it said. The yellow metal has inched lower by 0.50 per cent since January 31.
“Gold has had a negative correlation with equities and debt, and hence adding an allocation to gold in the portfolio can result in an optimum diversification of portfolio,” ICICI Securities said.
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