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Motilal Oswal Recommends 50:40:10 Equity Allocation Framework
Motilal Oswal Private Wealth has suggested one way to divide money among equity mutual funds.
It recommends putting half in mid- and small-cap funds.
Another 40% could go into hybrid and large-cap funds.
The remaining 10% could be invested in global funds.
The firm believes India’s economy and company profits are still strong.
However, higher oil prices, rising interest rates around the world and geopolitical risks could cause market uncertainty.
It thinks investors can consider investing a lump sum in hybrid funds now.
For pure equity funds, it suggests investing gradually and using a large market fall to invest more.
Investors should still check whether a fund suits their goals and risk level.
Motilal Oswal Private Wealth suggested allocating 50% to mid- and small-cap funds, 40% to hybrid and large-cap funds, and 10% to global equities.
The wealth manager is neutral on equities in the short term but positive over the long term.
It cited Q1FY27 GDP growth of 7.8% and approximately 18% year-on-year Nifty 50 profit growth as signs of domestic resilience.
Higher crude prices, rising global yields, fiscal concerns, geopolitical risks and increasing supply are creating uncertainty.
The report advised lump-sum investments in hybrid funds, while recommending staggered investments in pure equity funds over the next two to three months.
- Who
- Motilal Oswal Private Wealth made the allocation recommendation for mutual fund investors.
- What
- It proposed a 50:40:10 allocation across mid- and small-cap funds, hybrid and large-cap funds, and global equities.
- Where
- The framework focuses on Indian equity investments, with a 10% allocation to international funds.
- When
- The recommendation appeared in the September 2026 Alpha Strategist report and addresses the next two to three months for staggered equity deployment.
- Why
- The recommendation reflects strong domestic growth and earnings alongside risks from higher crude prices, rising global yields, fiscal concerns, geopolitical risks and increasing supply.
Key facts
- Suggested allocation
- 50% mid- and small-cap funds; 40% hybrid and large-cap funds; 10% global equities or international funds.
- Short-term view
- Neutral on equities.
- Long-term view
- Positive on equities.
- Q1FY27 GDP growth
- 7.8%.
- Nifty 50 profit growth
- Approximately 18% year on year.
- Nifty 50 valuation
- 18.3x 12-month forward P/E, about 12% below its historical average of 20.9x.
- Investment approach
- Lump-sum investments in hybrid funds; staggered deployment in pure equity funds.
Quotes
Motilal Oswal Private Wealth
Wealth management firm issuing the investment report
“any sharp correction should be used for aggressive deployment”
livemint.com
“lump-sum investments in hybrid funds at current levels”
livemint.com
Sources
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