portfolio: ETMarkets Smart Talk: From loss to gain: Amit Jain’s strategy for investors sitting on portfolio losses

In an interview with Kshitij Anand of ETMarkets, Jain said: “For investors in the age bracket of 30-40 years, a strategic sector allocation—30% in banking, 30% in FMCG, and 40% in quality PSU stocks—for long-term wealth creation,” Edited excerpts:

After a bearish February we entered a bullish March. How is the market looking for the 1st month of the new financial year?
The Indian markets showed resilience in March, rebounding from the February downturn, driven by strong domestic liquidity, positive global cues, and expectations of stable economic growth.

As we step into the first month of the new financial year, several factors will shape market sentiment.

April historically tends to be a positive month, supported by the new investment cycle, fresh institutional allocations, and earnings season kicking off. Key drivers include:

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Earnings Season: Q4 earnings will set the tone, especially in banking, IT, and consumer sectors. Investors will watch for commentary on margins and demand outlook.

Global Cues: U.S. Fed’s stance on rate cuts, inflation trends, and crude oil prices will impact FII flows.

Domestic Liquidity: Strong SIP inflows and retail participation have been cushioning volatility, and we expect this to continue.

Overall, while short-term volatility cannot be ruled out, the medium-to-long-term trajectory remains bullish, backed by strong economic fundamentals and corporate earnings growth.

Investors should focus on quality stocks and asset allocation strategies to navigate market fluctuations effectively.

Trump’s tariff is something which has kept traders on the edge. What is your take on the recent announcements and how it will impact India Inc.?
Trump’s tariff threats have unsettled global trade, but they present both risks and opportunities for India.

While sectors like manufacturing stand to gain from supply chain shifts, on the contrary Automobile, Pharma & IT sector could face challenges if protectionist policies extend to outsourcing.

Higher tariffs may also drive inflation, raising input costs for Indian firms and causing currency volatility.

However, with initiatives like Make in India and PLI schemes, India is well-positioned to capitalize on this shift. Short-term disruptions are likely, but businesses that adapt swiftly will emerge stronger in the evolving global trade landscape.

FIIs flows seems to be showing signs of turnaround – how do you see the trend in FY26?
FII flows into India are showing a sustained revival, driven by a favorable global rate cycle, strong corporate earnings, and India’s growing weight in global investment portfolios.

With the U.S. Federal Reserve expected to ease monetary policy, liquidity conditions are turning more supportive, attracting fresh foreign capital into Indian equities and debt markets.

The inclusion of Indian bonds in global indices is another structural shift that will drive consistent inflows, particularly from long-term institutional investors.

Sectors like financials, capital goods, FMCG & a few select Bank PSU’s and manufacturing are expected to benefit the most as India continues its capex-driven growth.

However, external risks such as oil price volatility and geopolitical tensions could lead to short-term fluctuations.

That said, India’s economic resilience and policy-driven reforms make it a key destination for global investors, keeping FII sentiment largely positive through FY26.

Any key developments or factors which one should watch out for in FY26?
FY26 will be shaped by global trade shifts, with U.S. tariffs impacting economies and reshaping supply chains. While this presents opportunities for Indian manufacturing however, sectors reliant on global trade may face headwinds. Geopolitical risks and commodity price volatility will also be key market influencers.

On the domestic front, India’s capex cycle, infrastructure push, and growing passive debt inflows from global bond index inclusion will drive liquidity. While Global uncertainties remain, India’s structural growth momentum keeps it well-positioned for investors in FY26.

What should be the ideal asset allocation for someone who is in the age bracket of 30-40 years? If someone plans to deploy Rs 10 lakh?
For investors, a strategic sector allocation—30% in banking, 30% in FMCG, and 40% in quality PSU stocks—for long-term wealth creation.

If someone is sitting on a net portfolio loss in 2025 – should they rejig the portfolio now? What are the key conditions which should get satisfied first before they rejig?
Looking at the current market conditions, we are still cautious on the Indian Stock Markets at least in the short-to medium term. If an investor has a net portfolio loss, then firstly it’s important to look at the current holdings.

In today’s scenario, if the stocks are down -20% to -50% I would recommend to do partial averaging in quality NIFTY 500 stocks. As of now we would still be weary of Small-cap & Micro-Cap stocks. Henceforth, it will be a stock-picker’s market.

What are the queries that you are getting from your clients?
Interestingly, we’re not seeing panic among investors or calls from clients looking to exit and book losses. Instead, most inquiries are about identifying the right entry points.

Investors are confident in the long-term growth story but are seeking clarity on when to deploy fresh capital or average their existing positions.

The focus has shifted from fear to opportunity, with clients looking for guidance on timing their investments rather than exiting the market.

This reflects the maturity and resilience of today’s investors, who recognize that volatility presents opportunities rather than just risks.

If someone plans to diversify globally – what would be the ideal portfolio allocation? Direct stocks or ETFs?
If an investor is looking to allocate some of their portfolio in a combination of ETF and direct stock then I feel there are a lot of opportunities within NIFTY 500 stocks which are trading at lifetime low valuations along with some great investment opportunities in Oil & FMCG ETF.

How should one play the small & midcap theme in FY26?
Small and midcap stocks have delivered strong returns post COVID-19 era, but in FY 25-26, investors need to be more selective. Valuations in some pockets have stretched, making stock picking crucial.

The focus should be on companies with strong earnings visibility, robust balance sheets, and scalable business models rather than chasing momentum-driven rallies.

Investors should also keep an eye on liquidity trends, as FII flows and domestic institutional participation will play a key role in sustaining the rally.

A staggered investment approach, rather than lump-sum exposure, can help navigate volatility while capitalizing on long-term growth prospects.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)