Why a 70:30 India-Global Portfolio Makes Sense in a Changing World
A carefully structured 70:30 India-global portfolio has emerged as an effective strategy for investors looking to manage currency risks, decrease concentration, and engage with global growth themes beyond domestic markets. As the Indian equity markets recorded modest returns of around 10% in 2025, significantly lower than the 16% returns in U.S. markets, the relevance of portfolio diversification has become increasingly clear.
The Case for a 70:30 India-Global Portfolio
The investment landscape is shifting due to several crucial factors:
– Currency Risk: With the Indian Rupee’s depreciation against the dollar, exposure to international currencies provides some insulation against local currency fluctuations.
– Evolving Global Drivers: Emerging themes such as artificial intelligence (AI), defense, and quantum computing are reshaping investment opportunities, making a purely domestic strategy insufficient.
– Balanced Approach: Combining familiarity with local markets and exposure to global opportunities is vital in today’s economic climate.
According to Subho Moulik, Founder and CEO of Appreciate, a 70:30 India-global portfolio can enhance risk-adjusted returns and allow investors to tap into powerful long-term growth trends worldwide.
Performance Insights
In discussing recent market performance, Kshitij Anand from ETMarkets highlighted that:
– Indian markets delivered a mere 10% return, while U.S. markets thrived with about 22% (factoring in currency effects).
– For international investors, allocating even a small portion of their portfolios globally could have yielded significantly higher returns. Moulik notes that his personal portfolio consists of 70-80% global investments, emphasizing the rationale behind diversifying into global assets.
Addressing Timing and Themes
– Bull Market Duration: Historically, bull markets have lasted anywhere from 7 to 16 years. The current bull market, while ongoing, has ample room for continuation, according to Moulik.
– Sector Diversification: Investing should not simply revolve around market timing; the real focus should be on sectors. For example, if companies like Coca-Cola and Pepsi are benefiting from India’s beverage market growth, investing in U.S.-listed global leaders enables investors to access broader market success.
Understanding U.S. versus Indian Growth Rates
While India may project a GDP growth of 7% for 2026-27, and global averages hover around 2.5% to 3%, Moulik emphasizes the importance of looking beyond these headline figures.
– Investing in the U.S. means not just grounding oneself in U.S.-centric companies; many global conglomerates are U.S.-listed and thrive on international markets.
– Market Reactions: Historically, the correlation between U.S. and Indian markets has been declining, suggesting that they may not respond identically to shocks in the future. This emphasizes the need for geographical diversification to mitigate risks from local market downturns.
Addressing Currency Concerns
Investors frequently worry about currency depreciation, especially with the rupee hovering near 90 against the dollar. Moulik explains that:
– Basic economic principles suggest a probable gradual depreciation of the rupee due to inflation differentials.
– Diversifying investments internationally provides a hedge against domestic currency risk, enabling access to sectors not prevalent in India, such as AI and defense.
Long-Term Investment Themes
When considering sectors for investment in 2026 and beyond, Subho Moulik recommends diversifying focus, including:
– Defense: Global defense spending is expected to rise, making it a solid investment area.
– Space: Opportunities will abound as defense companies evolve to pursue space-related projects.
– AI and Quantum Computing: These transformative technologies promise significant advancements and opportunities for early investors.
– Healthcare and Life Sciences: Rapid advancements are revolutionizing drug discovery timelines, establishing this sector as a lucrative area for future growth.
The Role of ETFs and Individual Stocks
Choosing between global ETFs and individual stocks is crucial:
– ETFs offer lower costs and easier sector exposure without the need for individual stock picking, making them ideal for less experienced investors.
– For those comfortable with individual stock trades, a mixed strategy may yield better diversification and results.
Overcoming Barriers for Indian Investors
Addressing common hurdles faced by Indian investors, Appreciate simplifies the onboarding process, ensuring a secure, compliant, and efficient investment experience.
– Seamless Remittance: Appreciate’s platform supports digital remittance processes, allowing investors to react swiftly to market opportunities without administrative delays.
– Tax Compliance: Tools are in place for easy tax reporting and compliance, giving investors one less thing to worry about.
Final Thoughts on Diversification
As 2026 approaches, Moulik encourages investors to embrace a 70:30 India-global portfolio. He advises:
– Regular Investing: The importance of systematic investing cannot be overstated. Time the market, but diversified portfolios should focus on sound fundamental investments rather than transient market trends.
– Continued Education: Leverage resources like Appreciate or other platforms to deepen understanding and access global opportunities.
By investing wisely and diversifying adequately, investors can secure their financial future while capitalizing on the captivating prospects offered by international markets.