ETMarkets Smart Talk| Stay invested in US markets despite record highs; diversification remains key: Naveen Kulkarni

Even as Wall Street scales fresh record highs and global uncertainty lingers, investors are increasingly questioning whether it’s the right time to stay invested in US markets or book profits.

In this edition of ETMarkets Smart Talk, Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS, shares why pulling out may not be the smartest move.

He highlights how overseas exposure has evolved into a critical diversification tool, helping investors navigate currency volatility, geopolitical risks, and concentration in domestic portfolios.


Kulkarni also weighs in on the growing dominance of select technology stocks, the risks emerging from the AI-driven rally, and how investors should approach global allocation in a disciplined manner.

From portfolio rebalancing strategies to sectoral trends shaping 2026, here’s how he suggests investors can stay grounded while tapping into global opportunities. Edited Excerpts -

Q) Thanks for taking the time out. Well, amid the gloom and the doom, US markets hit a fresh record high in April. What are you advising your clients who have invested in the US markets?

A) Overseas investment has become a diversification tool for investors, as dependency on one market has been challenging. In this context, overseas investments are relevant long-term investments to manage various risks like currency and geopolitical risks. Therefore, investors in overseas markets, including the US, should remain invested to benefit from diversification.

Q) I am sure you must be getting calls to invest overseas. What are the major concerns which investors are more concerned about?

A) The major concerns for investors in the US markets are the long-term impact of AI and the concentration risks arising on account of a select group of technology stocks doing very well. Some of these stocks have become exceedingly large, which poses long-term challenges if there is a severe market crash. The viability of these business models is not at serious risk at this juncture; however, investments in some of these spaces, especially from a venture capital perspective, could be reduced significantly over the medium term, which will impact the long-term growth prospects. If long-term growth prospects dwindle, then the correction could be very significant, which poses a serious risk. These are the key concerns of the investors.

Q) Tim Cook announced he is stepping down as Apple CEO after nearly 15 years, with the official transition on September 1, 2026. Do you see this in right direction, and will it impact on the price performance of the stock? Are you getting queries about Apple?

A) Apple is an extremely well-run company, and the transition from the legendary Steve Jobs to Tim Cook was very smooth. This time should not be any different for Apple, and the transition should be quite smooth. Companies like Apple have long-term product rollout plans handled by extremely competent teams. These plans and the ethos of those teams are unlikely to change significantly. Thus, while short-term impact cannot be ruled out, over the longer term, Apple will continue to see smooth transitions and consistent execution.

Q) FAANG, Mag 7 are acronyms which we have come across in the US markets. Is there another acronym which is getting popular?

A) BATMMAAN is a popular acronym that represents MAG 7 along with Broadcom. Broadcom has surpassed the US$ 1 trillion mark, leading to the increasing popularity of BATMMAAN.

Q) With US markets hitting fresh record highs, how much one should ideally park monthly in overseas stocks or ETFs?

A) The US markets are hitting new highs, and high-net-worth investors should look at 5% allocation to overseas investments through diversified instruments such as ETFs.

Q) We are in the first month of the financial year 2027. When is the ideal time to relook or rebalance their global portfolios?

A) This is a good time to start reviewing portfolios. The quarterly results provide a decent opportunity to relook at global portfolios and both domestic and global portfolios for rebalancing.

Q) Which sectors are hogging limelight in 2026? Is it power, infrastructure, etc. and why?

A) Power and Capital goods sectors are seeing consistent allocation because of the global as well as domestic tail winds. These sectors have strong earnings visibility and will continue to perform in 2026.

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