If you have Rs 10 lakh now, how would you invest it?
In this premium quarterly feature by Financial Express, we lean on some of India’s top fund managers to answer this very question.
Brijesh Ved, Head-PMS, Kotak Mahindra AMC
Brijesh Ved listed out his asset allocation table and highlighted the top bets and one contrarian call
# The Allocation Table
(A Rupee-based breakdown of Rs 1,000,000 across asset classes)
| Asset Class | Amount | % of total |
| Large Cap | Rs 4,00,000 | 40% |
| Midcap | Rs 2,00,000 | 20% |
| Small Cap | Rs 1,00,000 | 10% |
| Total Equity | Rs 7,00,000 | 70% |
| Debt | Rs 2,00,000 | 20% |
| Kotak Gold Silver Passive | ||
| FOF | Rs 1,00,000 | 10% |
| Alternate/ Precious Metal | Rs 1,00,000 | 10% |
# The Core Thesis
According to Brijesh Ved, the Core thesis is “Global growth and global macros remain resilient despite geopolitical uncertainty and disruption from trade wars. IMF has raised its 2025 world growth forecast to 3.2% (from 3.0%) in its October outlook, while retaining 3.1% for 2026.”
“Both advanced and emerging economies saw 10 bps upgrades from the July projection, led by the resilience in U.S. activity and robust Indian growth.”
“India’s GDP growth in Q2 FY26 surprised significantly on the upside, registering 8.2% with GVA at 8.1%. Growth was driven primarily by manufacturing and services on the production side, while on the expenditure front, private consumption and investments were the key contributors.”
“High-frequency indicators for November suggest that overall economic activity has held up with demand conditions remaining robust. Financial conditions remained benign, and the flow of financial resources to the commercial sector remained robust.CY2025 turned out to be a so-so year for Indian markets with limited returns for investors in general.”
“However, there was wide variance in performance across sectors and stocks. CY2026 can see (1) strong recovery in earnings of the market; we are more confident about decent earnings recovery in most sectors, (2) improved domestic consumption demand on the back of GST and income tax rate cuts and lower interest rates and (3) a likely better macro.
Overall, India’s economic outlook reflects strong resilience and promising growth potential, even amid global slowdowns, tariff tensions, and currency pressures.”
“The optimism is underpinned by a robust services sector, rising domestic consumption, strategic government initiatives, and supportive RBI policies. With GDP growth rebounding and inflation on a downward trend, India is well-positioned,” he added.
Considering above macro, Brijesh Ved said that allocations have been done to respective asset classes:
- Global geopolitical uncertainty: Allocation to precious metals
- Slower than expected growth in CY2025, uncertainty over India’s export growth & falling interest rates cycle: Allocation to debt
- Strong earnings recovery is expected in CY2026 for leadership businesses: Equities, higher allocation towards large caps given better margin of safety in large cap
# The ‘Watchlist Five’: 5 specific sectors on the radar
-Consumer goods- discretionary & staples
-Capital goods
# The Contrarian View
Brijesh’s key contrarian bets include the following
– Private sector banks: Core profitability is at the cusp of a recovery as core revenue growth inflects from 2HFY26F and operating leverage drives better core PPoP performance over the next few years.
–NBFCs: Disbursement growth and run rates are expected to improve sequentially, as H2 is generally better in terms of business momentum. Overall sector margins are expected to remain largely stable, although trends will vary across sub-sectors. HFCs and vehicle financiers are likely to report marginally higher NIMs.
Anand Shah, CIO PMS & AIF – ICICI Prudential AMC
Anand Shah listed out his asset allocation table and highlighted the top bets and one contrarian call
# The Allocation Table
(A Rupee-based breakdown of Rs 1,000,000 across asset classes)
| Asset Class | % of Allocation |
| Large Cap | 50% |
| Midcap | 7% |
| Small Cap | 13% |
| Gold | 15% |
| Debt | 15% |
# The Core Thesis
Anand Shah highlighted the core thesis driving this specific allocation for the next 12 months.
According to Shah, “This allocation is purely from the point of view of a long term investor, who doesn’t mind short-term volatility. We believe when investing in equities as an asset class, one should maintain a long-term investment horizon of at least five years. We remain constructive towards equities for the long term, hence, the asset allocation above has a predominant equity exposure.”
“That said, we believe going ahead, the next phase of equity market returns is likely to be more measured. The returns would be driven by bottom-up stock selection rather than broad market trends.”
“The Indian equity market today stands at an important inflection point. Domestic growth indicators such as GST collections, credit growth, and capex traction have potential to lead to an earnings recovery. At the same time, global macro uncertainties and elevated valuations warrant a disciplined investment approach.”
“Within this construct, large caps form the core, as they offer relatively better valuation comfort, resilient balance sheets, and earnings visibility. Further, we believe select exposure to small-cap and mid-cap names, where structural growth and competitive advantage are observable, has the potential to unlock value over the longer term.”
“We have kept an equal exposure to debt and gold as we believe fixed income plays a stabilising role given market volatility and valuation concerns, while gold serves as a strategic hedge against inflationary or currency pressure,” he added.
#The ‘Watchlist Five’: 5 specific sectors on the radar
1. Select Private Banks – Preferring banks backed by asset quality & better underwriting discipline.
2. Financial Services – Asset managers & Insurance – both benefiting from deeper household financialization – through increasing household allocation to markets and rising protection awareness.
3. Capital Goods / Infrastructure Play – Companies benefiting from the rising capex cycle and infrastructure push.
4. Consumer Services & Select Retail – Demand resilience and evolving consumption patterns, that is driving growth for select retailers and consumer services names.
5. Power & Energy – We believe that policymakers may continue to invest in strategically important sectors such as power and energy security, benefiting names within power, renewable energy, energy storage, and electric vehicles (EVs) manufacturing.
# The Contrarian View
Anand Shah believes there are certain names in the “specialist chemicals, fertilisers and textiles space, specifically in the mid and small cap segment that have been out of favour over the past year, have the potential to surprise on the positive side over the longer term. We believe an earnings recovery is likely to support prices, as sentiment and input pressures normalise, utilisation rises and export/remediation opportunities arise.”
Sandipan Roy, CIO – Motilal Oswal Private Wealth
Sandipan Roy listed out his asset allocation framework and shared his market view, key focus areas, and one contrarian call.
# The Allocation Table
(A Rupee-based breakdown of Rs 1,000,000 across asset classes)
| Asset Class | % of Allocation |
| Large Caps | 10% |
| Small and midcaps | 10% |
| Hybrid Funds | 20% |
| Emerging market | 20% |
| Debt | 10% |
| High Yield Credit | 20% |
| Commodities | 10% |
# The Core Thesis
Sandipan Roy outlined the key factors shaping this allocation strategy.
“Markets are at an interesting point with investors at tenterhooks due to ongoing uncertainties, but VIX, the measure of perceived risk, is at multi-year lows. In fact, Indian VIX had come into single digits just two weeks back, which was a record low.”
“The current global macro environment reflects a phase of normalisation after an extended period of optimism, alongside rising geopolitical risk. Momentum in AI-led capex and earnings expectations is moderating as the focus shifts from hype to execution and monetisation. US. military intervention in Venezuela has reignited geopolitical tensions at a time when the world was just getting settled post the tariff phase. This event may further cement de-globalisation and the rise of a multi-polar world.”
“On the domestic front, the macro environment has remained stable over the last 12 months and is expected to remain so this year as well. Growth is likely to pick up as fiscal, monetary, and regulatory reforms start impacting the broader economy. Inflation may see some pickup as base effects wane but is likely to stay within a comfortable range.”
“The current account deficit could see some pressure as the trade deficit remains elevated. The government may continue on the path of fiscal prudence, though from this year onwards, total debt-to-GDP will become the guiding metric instead of fiscal deficit as a percentage of GDP. Forex reserves may see some depletion as the RBI works to manage INR depreciation.”
“From a market perspective, this year may witness a normalisation of excesses created over the last few years. A probable unwinding of AI overhype may result in ‘AI-loser’ markets like India seeing flows coming back.”
“The rupee is likely to stabilise after last year’s sharp depreciation, given it has become undervalued in REER terms. Earnings recovery for Indian markets could return in the lower double digits, led by the banking sector as the impact of NIM compression normalises.”
“China has realigned its priorities from real estate and infrastructure to emerging technology and manufacturing prowess. This, along with anti-involution measures aimed at limiting excessive competition, may lead to margin improvement for Chinese corporates and an improving return profile. Chinese equity markets have remained disconnected from economic growth for an extended period, and increased investor interest could result in a rise in Chinese equities.”
“In fixed income, with inflation under control, the focus has shifted back to growth, giving the RBI further scope to cut rates depending on the extent of rate cuts by the US Fed. While there may be some supply-side pressure in the current quarter, the higher spread between the 10-year and 15-year yields versus the repo rate provides an attractive entry point in duration strategies. As a result, 10-year and 15-year G-Secs could be a favourable play from a 12-month perspective. We continue to maintain a core allocation towards credit accrual strategies.”
“Commodities could remain in a bull phase in the new year due to rising uncertainties, currency debasement, and de-globalisation leading to realignment of global supply chains. A volatile environment may also be more conducive to hybrid strategies such as dynamic asset allocation and multi-asset approaches.”
# The ‘Watchlist Five’: 5 specific sectors on the radar
-Midcap private banks
-Metals & Mining – Precious and industrial metals, both non-ferrous and ferrous
-India 10-year & 15-year G-Secs
-China-focused funds
-Defence
# The Contrarian View
Sandipan Roy has identified the Indian IT sector as his key contrarian bet.
Ajay Bagga, Market Veteran
Ajay Bagga shared his model portfolio for the next 12 months, outlining his asset allocation, macro outlook, sector preferences, and one contrarian call.
# The Allocation Table
(A Rupee-based breakdown of Rs 1,000,000 across asset classes)
“This model portfolio is prepared for a 12-month horizon starting January 2026, targeting a balanced mix of domestic growth, global technology leadership, and silver shortage and continued gold outperformance in terms of commodity exposure.”
| Asset Class | Amount | % of Allocation |
| Large cap | Rs 3,00,000 | 30% |
| Midcaps | Rs 1,50,000 | 15% |
| Smallcaps | Rs 1,50,000 | 15% |
| US ETF (broad market) | Rs 1,00,000 | 10% |
| China ETF | Rs 1,00,000 | 10% |
| Silver | Rs 1,00,000 | 10% |
| Gold | Rs 50,000 | 5% |
| US Magnificent 7 (AI Focus) | Rs 50,000 | 5% |
# The Core Thesis
The core thesis driving Ajay Bagga’s views is a mix of global and local factors.
Ajay Bagga said, “As we enter 2026, the global macro environment is defined by heightened geopolitical risk, reducing geoeconomic risk with Trump tariffs being rendered secondary to Trump midterm survival via affordability-focused themes, continued global monetary easing as well as fiscal stimulus by major economic centres from the US, China, Japan, Europe and India.”
“There is a two-speed ‘K-shaped’ stability. We expect global growth to continue with India being the leading major economy in terms of GDP growth.”
“Trump deregulation and tax cuts will help US corporate earnings, while Japan and China will see large stimulus packages, and Europe will see heavy lifting being done by the German stimulus for infrastructure, power and defence scale-up.”
“While high interest rates have cooled broader consumption in the West, the artificial intelligence revolution has moved from speculative hype to a fundamental capex cycle.”
“This portfolio is anchored by India’s domestic resilience, with 60% of the capital staying home to capture the steady double-digit earnings growth and a cooling valuation environment in large caps as Indian markets witness a mean-reversion, catch-up trade in 2026.”
“The 15% allocation to gold and silver serves as a necessary volatility insurance. With silver entering a structural supply deficit and gold acting as a hedge against potential currency instability, these commodities provide a non-correlated safety net.”
“The international component balances the portfolio. The China ETF captures a deep value recovery play as Beijing ramps up fiscal stimulus and presents cheaper AI opportunities, while the US allocation ensures participation in the largest economy, the largest capex buildout, the largest defence spender and the most liquid market on earth.”
“Overall, this strategy seeks to capitalize on the AI productivity harvest of 2026 while maintaining enough diversification to withstand geopolitical noise.”
#The ‘Watchlist Five’: 5 specific sectors on the radar
-US Technology (Hyperscalers): Companies providing the shovels for the AI gold rush, spanning cloud and compute, with software companies increasingly transforming into hardware giants.
-India Banking & Financials: Large-cap banks with superior credit growth and improving NIMs, as well as NBFCs benefiting from lower cost of funds and better credit growth impulses.
-Industrial Commodities (Silver): Driven by massive silver requirements in solar, AI and EV infrastructure.”
-Chinese AI plays at a relative discount to the US and e-commerce: Emerging Chinese AI tech giants benefiting from a focus on building domestic AI alternatives and a pivot toward domestic consumption.”
-Power & Infrastructure: The backbone supporting India’s long-term manufacturing ambitions and services growth.
#The Contrarian View
Ajay Bagga outlined that the most contrarian move in this portfolio is the 5% overweight in the US ‘Magnificent 7’ stocks. By early 2026, many investors have grown fearful of an AI bubble similar to the 1999 dot-com crash.”
“However, unlike 1999, today’s technology giants are backed by fortress balance sheets and tangible cash flows. We expect the outperformance of the ‘Magnificent 7’ to continue as they successfully monetise AI integrations into software and services.”
“While others rotate out of technology in fear, we believe ‘growing into the multiple’ will be the theme of 2026.”
Deven R Choksey, Founder and MD of DRChoksey Finserv
Deven R Choksey outlined his model portfolio for the next 12 months, detailing his asset allocation, macro view, sector preferences, and a contrarian call.
#The Allocation Table
(A Rupee-based breakdown of Rs 1,000,000 across asset classes)
| Asset Class | Amount | % of Allocation |
| Large cap equity | Rs 5,00,000 | 50% |
| Midcap equity | Rs 2,00,000 | 20% |
| Equity Mutual Funds | Rs 1,00,000 | 10% |
| Commodities – Gold | Rs 1,00,000 | 10% |
| Fixed income/Bond Funds | Rs 1,00,000 | 10% |
#The Core Thesis
According to Deven R Choksey, “This portfolio is structured to balance growth, stability, and hedging over the next 12 months, keeping India’s domestic strength at the core while managing global uncertainties.”
“India enters 2026 with strong domestic growth – GDP is projected at 6.5-6.8%, supported by robust consumption, GST rationalisation, and tax relief boosting disposable incomes.
“With the RBI having cut rates and likely pausing, interest rates remain supportive for both equities and bond markets.”
“Large-cap (50%) captures earnings recovery across quality names amid domestic resilience. Both Kotak and Client Associates forecast selective upside in equities, predicting the Nifty/Sensex to touch ~29,000/93,900 by year-end.”
“Midcap (20%) targets higher beta opportunities from continued private capex trends and rural demand. Analysts spotlight mid-cap potential despite selective risk.”
“Equity Funds (10%) provide diversification across the domestic story and access to thematic segments like fintech and manufacturing growth, while mitigating single-stock risk.”
“Gold (10%) acts as a portfolio hedge. With elevated geopolitical risk and potential rate cuts ahead, OCBC and UBS forecast gold prices rising to US $4,800–5,000/oz in 2026.”
“Fixed Income (10%) offers stability. With bond yields near cycle lows, the allocation supports diversification and income generation amid potential volatility.”
“This mix balances growth (60% equity), safety (20% defensive), and hedge (20% bonds + gold), positioning the portfolio to ride India’s domestic growth while managing global uncertainty over the next 12 months.”
#The ‘Watchlist Five’: 5 specific sectors on the radar
– Consumer lending NBFCs and private sector banks
-Power and utilities
– Automobiles, particularly commercial vehicles and auto ancillaries catering to electric vehicle adoption
– Ultra-luxury real estate
– Select metal stocks
# The Contrarian View
Deven’s has identified auto ancillaries as a key contrarian bet.
Conclusion
Most of the fund managers predict a structural shift for investors in 2026. If you want to invest Rs 10 lakh, they suggest allocating a significant amount to equities with a bias towards large caps. Gold and silver provide the essential hedge against global volatility. The high conviction watchlist that they have identified include sectors that are likely to lead earnings growth and are core to the consumption theme.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.