How to invest in 2021? Here's what experts say | Economic Times

ETIntelligence Group: As investors welcome 2021 amid volatile markets, the fear of new virus strain and hope of mass vaccination, ET Intelligence Group spoke to financial planners and distributors on allocations to mutual fund portfolios to gain the most from current market conditions. The experts recommend retail investors to add large-and-midcap schemes and gold ETFs in their portfolios.Rupesh Bhansali, head of mutual funds, GEPL Capital said, “The present rally in the market is broader than the previous one. It will cover not only well-placed large companies but also mid-sized companies. It is therefore important to add a large-and-midcap scheme to the portfolio.”Financial planners such as Harshvardhan Roongta, CFP, Roongta Securities, are advising clients to include balanced advantage schemes apart from large-and-midcap schemes. “We are entering a peculiar situation wherein most triggers for the rally are reflected in prices. Now, it is important to look at companies which have the strength of balance sheet, brand and size of operations,” Roongta said.Among large-and-midcap schemes, distributors recommend Invesco India Growth (value and growth, large and midcap focused companies), Canara Robeco Emerging Equities (midcap focused) and Kotak Equity Opportunities (growth-oriented, large and midcap focused stocks). 80086722Experts also recommend exposure to gold through exchange-traded funds (ETFs). Chirag Mehta, senior fund manager-alternative investments at Quantum Mutual Fund in his Gold Outlook for 2021 said, “We expect interest rates in the US as well as the rest of the Western hemisphere to be low for a longer time. This makes holding gold a more viable option than holding US treasuries as it successfully preserves purchasing power in a negative real rate environment.” He believes the precious metal will be more effective than bonds in mitigating equity market risks by providing portfolio diversification.Financial planners recommend gold ETFs with good liquidity including Nippon India ETF Gold BeES, UTI Gold ETF and HDFC Gold ETF.