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As India awaits the results of general elections on June 4, 2024, many investors are looking to take up tactical allocation and make the most of this event.
Tactical allocation refers to doing strategic investment to benefit from a particular event like rate cut, election outcome and so on.
Ashish Shah, Founder, Wealth First Portfolio Managers feels that investors can look at funds focusing on PSU banks for tactical allocation. He said, “I think the group of people who are sceptical about results should sit in cash. Another set of investors who have a high-risk appetite should allocate 15-20% of their lumpsum investible corpus in funds having exposure to PSU banks and commodities. This is because of the government’s focus on manufacturing that will have positive impact on PSU banks and commodities are going through an upcycle trend globally.”
Pune MFD Hiten Shah of Hiten Shah Financial Services feels that investors should take some position in large cap funds. “There is a high chance that the current government will come to power again and that too with a huge majority. Market will react positively to this development and large cap indices can go up. I think investors should invest in large cap funds to benefit from the upcoming event.”
Anand MFD Milan Patel, Shree Hari Financials Services also feels that investors should allocate some corpus in large cap index funds to benefit from the election outcome.
However, a few MFDs have a different view. Kolkata MFD Mukesh Dokania feels that investors should invest in debt funds. He said, “I think the market is overvalued at the moment and a major correction is due in the days to come. Investors should invest in debt instruments to ride the volatility.”
Deepak Jaggi, Co-founder and Managing Director of Satco Wealth said he will not recommend his clients to take any tactical call. He said, “I am of the opinion that markets will not witness any major correction. Even if there is a correction, I don’t expect markets to correct beyond 4%. Hence, investors should look at approaching markets through STPs route in a diversified fund.”
