ETMarkets Smart Talk | 10–15% allocation to gold and silver is enough for portfolios: Sandeep Bagla

Synopsis

Gold and silver have maintained their value in a volatile 2026, prompting investor interest. However, experts advise limiting precious metal exposure to 10-15% to avoid deviating from core asset allocation, even amidst talk of a commodity supercycle. Earnings are tepid, with banks performing adequately, while most sectors are expected to miss high market expectations.

Gold and silver have emerged as the rare asset classes that have retained their shine even in a volatile 2026, prompting investors to reassess their exposure to precious metals.

However, amid rising prices and talk of a commodity supercycle, experts are cautioning against over-allocation.

In an interaction with ETMarkets Smart Talk, Sandeep Bagla, CEO of TRUST Mutual Fund, says that while gold and silver play an important role in portfolio diversification, investors should limit their exposure to 10–15% and avoid drifting away from their core asset allocation in the pursuit of short-term gains. Edited Excerpts –

Q) Thanks for taking the time out. It looks like there is some nervousness on D-Street – is it because of Budget or geopolitical concerns. How should investors decode?

A) Equities have bounced back a bit on back of expectations of Budget announcements and the India Europe trade deal. Markets saw a bout of correction due to high valuations and slowing growth. A few stocks underwent sharper price correction.

While RBI cut rates, market yields actually rose. High valuations cannot sustain in absence of hope sustained earnings growth. Investors need to lengthen their holding period time horizon and be patient.

Q) There are 2 precious metals which have not lost their sheen even in 2026 – Gold & Silver. We have seen some volatility – how should one play this theme?

A) One should have 10-15% allocation in gold and silver and benefit from the price gains. While the precious metals can go up as a part of a commodity supercycle, one must resist the temptation to move away from their asset allocation

Q) The December quarter earnings are underway – what is your take on the earnings which have so far?
A) Earnings are tepid, banks are doing alright, but most sectors are likely to fall short of elevated market expectations

Q) Hiring has taken back seat in the Indian Technology sector. What is your take on the service space amid rupee depreciation, rise of AI and global slowdown?
A) IT is likely to be a steady but lack lustre sector to invest in. Mid cap IT stocks tend to show greater promise

Q) How should one play the small & midcap theme?
A) Small and mid caps encompass close to 1000 investable stocks having market cap larger than Rs 2000 crs. One must invest through Mutual fund schemes in diversified well researched portfolios.

People make the mistake of making direct investments without adequate information and proper risk understanding. Select mid and small caps will continue to perform well.

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

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