50-60% India, up to 30% global equities ideal for long-term portfolios: Sachin Sawrikar

At a time when Indian equities continue to trade at a premium and global markets present selective opportunities, asset allocation has become a critical decision for long-term investors.

Sachin Sawrikar, Managing Partner at Artha Bharat Investment Managers, believes a balanced approach is key. He suggests that portfolios be anchored with 50-60% exposure to Indian assets, complemented by up to 30% allocation to global equities, while factoring in currency risks, valuation gaps, and structural growth drivers.

In this interview, Sawrikar shares his views on Budget 2026, global diversification, trade agreements, and the evolving role of commodities in investor portfolios. Edited excerpts:

Q) How has Budget 2026 turned out for Indian investors investing in global markets?

A) Budget 2026 is broadly constructive for Indian investors with global exposure. Measures around capital market reforms, tax certainty, and strengthening IFSCs such as GIFT City improve cross-border capital flows and market confidence.

However, the absence of further easing, such as a reduction in TCS under LRS for overseas investments, remains a constraint. This reflects policy caution that can limit Indian investors from fully benefiting from global market opportunities.

Q) Do recent India-US and India-EU trade deals strengthen the investment case for these markets?

A) The trade agreements improve India’s global positioning by expanding market access and reducing policy uncertainty. They support export-led growth and supply chain integration.

While not an immediate trigger for broad market re-rating, such deals are critical for India’s next growth phase. Had an India-EU deal been concluded 15 years ago, textile exports could have been significantly higher. To reach a ten trillion dollar GDP, India will need more comprehensive trade partnerships.

Q) How do Indian market valuations compare globally over the long term?

A) Indian equities trade at a premium to most emerging markets, supported by stronger growth visibility and domestic demand. Valuation gaps with developed markets have narrowed.

Sustaining this premium will require productivity-led profit growth similar to what the United States experienced in the 1990s through efficiency gains and reforms.

Global diversification and structural improvements are essential for long-term investors.

Q) How should investors factor in currency risks, particularly INR depreciation?

A) Currency is a key factor in global investing. INR depreciation can boost returns on overseas investments but also adds volatility. Investors should evaluate global allocations on a risk-adjusted basis, taking into account hedging costs, taxation, and long-term currency trends rather than short-term moves.

Q) What could be an ideal asset allocation for investors deploying ten lakh rupees or more?

A) A diversified portfolio may include 50 to 60 percent in Indian assets, 20 to 30 percent in international equities, 10 to 15 percent in fixed income, and a modest allocation to gold or commodities, aligned with risk appetite and investment horizon.

In practice, ten lakh rupees is often a relatively small starting amount for overseas diversification. Global funds often require larger minimum investments, and currency spreads and transfer costs can significantly affect returns at lower ticket sizes.

Q) Will commodities play a larger role in portfolios going forward?

A) Commodities could gain relevance due to structural themes such as energy transition, geopolitical shifts, and supply chain realignment. Precious metals have delivered meaningful, relatively uncorrelated returns in recent years.

However, given their volatility and potential for sharp drawdowns, commodities are best used as diversifiers and considered only after investors are comfortable with core global allocations in traditional asset classes.

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