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After a year in which Indian equities delivered positive but uninspiring returns, investors are entering 2026 with a clear question: how should portfolios be positioned when headline indices are resilient, but global uncertainty and valuation concerns persist?
The Nifty ended 2025 with a gain of about 10.7%, marking its tenth consecutive year of positive returns. Yet, compared with the strong rally of the past five to six years and relative to global peers, 2025 stood out as a year of consolidation rather than outperformance. Against this backdrop, CNBC-TV18 spoke to Feroze Azeez, Joint CEO at Anand Rathi Wealth, and Mohit Gang, Co-Founder & CEO of Moneyfront, to understand how medium-risk investors should think about asset allocation in 2026.
Their views converge on one key point: 2026 will reward disciplined asset allocation more than aggressive stock picking. However, their model portfolios differ meaningfully in structure, risk preference, and the role of global assets.
Equity remains central—but allocation is key
Both experts agree that equity should remain the core of a long-term portfolio, even after a decade-long bull run.
Azeez recommends that long-term investors maintain 65% equity exposure, with the flexibility to go as high as 80% if risk appetite and time horizon allow. His emphasis is on mutual funds rather than direct stocks, arguing that diversification significantly reduces volatility while retaining equity upside.
Gang is also constructive on equities but adopts a more layered approach. He splits portfolios into 80% strategic, long-term allocation and 20% tactical allocation for opportunistic bets. Within the strategic portion, equities form the backbone, but are diversified across geographies and market segments.
The shared takeaway: stepping away from equities due to a “slow” year like 2025 may prove counterproductive, especially for investors with multi-year horizons.
Two model portfolios, two philosophies
Feroze Azeez’s broad equity-led approach
Azeez’s recommended equity allocation spans across market caps, with a clear tilt toward diversification:
Large caps: 55%
Mid-caps: 23%
Small-caps: 22%
Despite concerns around small-cap froth, Azeez remains bullish on the segment. He argues that headline index declines mask underlying earnings growth due to frequent index churn. According to his assessment, small-cap earnings growth for FY25 was closer to 18%, with long-term EPS growth potential of over 30%.
His preferred funds include:
Invesco India Largecap Fund
Kotak Midcap Fund
HDFC Small Cap Fund
Kotak Multicap Fund
Bandhan Large & Mid Cap Fund
Even a subset of these, he says, can replicate the desired large-mid-small cap balance.
Mohit Gang’s globally diversified, allocation-first strategy
Gang’s model portfolio is more globally diversified and commodity-inclusive:
50% domestic equities
20% international equities
10% fixed income
20% commodities (gold and silver)
He believes international equities should be a core allocation, not an afterthought. While the US will naturally form a large part of global exposure, he stresses the importance of diversification beyond a single market.
Domestically, Gang is cautious on small caps for now, citing lingering valuation froth despite recent corrections. His preference lies with large caps and mid-caps, which he believes are better positioned to lead the next phase of market momentum.
Also Read | 2025 wasn’t about mutual fund returns — it was about behaviour
Gold over debt: a notable shift
One of the strongest common themes is a rethinking of traditional debt allocation.
Azeez is openly bearish on conventional debt, suggesting that half of a typical debt allocation should be redirected to gold, preferably through gold funds rather than ETFs. Gang, meanwhile, allocates a full 20% of his portfolio to commodities, split between gold and silver, to hedge against macro uncertainty and enhance diversification.
The message for investors is clear: fixed income is no longer the default stabiliser it once was, and alternatives like gold are increasingly taking centre stage in medium-risk portfolios.
Passive, active, and the importance of structure
On fund selection, Gang favours passive strategies for large caps, citing efficiency and consistency, while preferring active management in mid-cap and blended categories. His key picks include:
Nifty Next 50 (UTI Nifty Next 50) for slightly aggressive investors
Nifty 100 for moderate investors
Invesco Large & Mid Cap Fund for active exposure
Edelweiss Gold and Silver Fund for commodities
Azeez, meanwhile, focuses on building a multi-fund basket that delivers diversification across caps and styles, reducing reliance on any single market outcome.
How to deploy money in 2026
With markets lacking a clear trend, both experts advise against rushing in with large lump-sum investments. Gang recommends staggered deployment over about six months, allowing investors to average into positions while monitoring momentum and global flows.
The bottom line
While their portfolios differ in composition, Azeez and Gang agree on the larger message for 2026: investors should prioritise asset allocation, diversification, and risk alignment over chasing past performance.
After a year defined by resilience rather than returns, 2026 is shaping up to be a year where structure, discipline, and patience could matter more than bold bets.
Also Read | 2025: A reality check for equity investors — what worked, what failed, and how to invest in 2026
Watch accompanying video for entire discussion.
