ETMarkets Smart Talk: Want to diversify globally? 3 reasons why ETFs might be a smarter bet, decodes Achin Goel

“In my opinion, buying an ETF would beryllium much beneficial and rewarding for the investors who are looking to diversify their portfolio globally,” says Achin Goel, Vice President astatine Bonanza.

In an interrogation with Kshitij Anand of ETMarkets, Goel said: “Put it together, whether aiming for assemblage exposure, geographical diversification, oregon tapping into caller trends, planetary ETFs tin service arsenic a invaluable instrumentality successful gathering a well-rounded concern portfolio,” Edited excerpts:

Q) After a bearish February we entered a bullish March. How is marketplace looking for the 1st period of the caller fiscal year?
A) India's banal marketplace experienced a notable rebound successful March 2025, with a 6.3% instrumentality driven by FIIs becoming nett buyers and consequent abbreviated covering. The sustainability of this rally hinges connected outer factors, peculiarly U.S. tariff announcements by President Trump.

If tariffs are little terrible than anticipated, sectors similar pharmaceuticals and IT could pb a marketplace surge. Conversely, stringent tariffs mightiness precipitate different downturn. Market sentiment has shifted towards optimism, with caller terms corrections making valuations much charismatic and supporting a affirmative medium-term outlook.

However, planetary economical developments, particularly successful the U.S., could present uncertainty. While the existent outlook is constructive, investors indispensable stay cautious astir imaginable planetary marketplace disruptions.

The power of statements from cardinal figures and economical resets successful the U.S. could interaction planetary assurance and pb to marketplace volatility. Therefore, vigilance is advised regarding planetary economical shifts and their imaginable interaction connected fiscal markets.

Q) Trump’s tariff is thing which has kept traders connected the edge. What is your instrumentality connected the caller announcements and however it volition interaction India Inc?
A) US President Donald Trump's caller tariff announcements person sent planetary markets into a tailspin, with India Inc. bracing for impact. Uncertainty looms implicit whether President Trump volition travel done with his threats to enforce reciprocal tariffs connected its cardinal trading partners including India connected April 2.

While the US is engaged successful commercialized statement with India, stakeholders stay hopeful that US volition defer the planned reciprocal tariffs, yet concerns stay implicit however they would beryllium applied whether astatine the product, sector, oregon state level.

Sectors that tin beryllium negatively impacted by tariffs includes processed foods, intoxicant & wines, pharmaceutical, jewellery, chemicals, automotive industry. Meanwhile, immoderate sectors volition not look further tariffs arsenic the US already imposes higher duties connected includes ores, minerals & petroleum, and garments.

Q) FIIs flows seems to beryllium showing signs of turnaround – however bash you spot the inclination successful FY26?
A) For the archetypal clip successful six months, FIIs person turned nett buyers successful the Indian equity market, with nett inflows of Rs. 2,014.18 Cr successful the past period of FY25.

The caller FII travel reversal was crushed down Indian marketplace outperformance against planetary peers past week, driven by affirmative overseas capitalist sentiment and a 0.6%- rupee appreciation against the dollar. Although FII flows are inactive volatile contempt this reversal, with planetary markets uncertain astir imaginable US tariffs.

Looking up to FY26, the sustainability of FIIs flows volition beryllium aided by cardinal factors specified arsenic the severity of Trump's reciprocal tariffs, the spot of the rupee, and US monetary argumentation decision.

If the tariffs stay manageable and the RBI continues its easing stance successful the upcoming argumentation gathering connected April 9, India could spot sustained FIIs interest.

However, risks from planetary commercialized tensions, inflationary pressures, and US monetary argumentation are inactive cardinal ticker points for the investors.

Q) Any cardinal developments oregon factors which 1 should ticker retired for successful FY26?
A) As we participate FY26, investors should intimately show respective captious factors that could importantly interaction marketplace dynamics.

The imminent rollout of Trump's reciprocal tariff program successful April warrants attention, though India whitethorn look constricted vulnerability arsenic it demonstrates willingness to trim tariffs connected implicit fractional of US imports worthy $23 cardinal successful the archetypal signifier of a imaginable bilateral commercialized agreement. Recent four-day negotiations betwixt Indian and US officials person established a model for sectoral discussions successful coming weeks.

The RBI's Monetary Policy Committee gathering connected April 7-9 represents different pivotal event, with expectations of a 25bps complaint chopped bringing the repo complaint to 6%, supported by projections of sub-4% header inflation.

Looking ahead, Q4FY25 firm net volition beryllium important aft 3 disappointing quarters, with meaningful betterment perchance materializing lone successful Q1 oregon Q2 of FY26.

Caution is advisable with car stocks, support vigilance toward IT assemblage performance, and beryllium highly selective successful CAPEXrelated investments arsenic India navigates done 6.3-6.8% projected GDP maturation amid evolving planetary monetary policies and commercialized tensions.

Q) What should beryllium the perfect plus allocation for idiosyncratic who is successful the property bracket of 30-40 years? If idiosyncratic plans to deploy Rs 10 lakh?
A) In existent script for an idiosyncratic successful property radical of 30-40 years, Rs.10 lakh concern tin beryllium breached into 70% Equities, 20% Debt, 10% Gold.

Among equity, I'll similar to put 20% successful Large-cap basket, 30% successful Mid-cap names & remainder 20% successful small-cap stocks. Debt vulnerability (preferably 10Y GILT) is to seizure the upside arising owed to anticipated complaint cuts successful the existent twelvemonth and Gold volition guarantee to prehend the accidental owed to planetary uncertainty.

Q) If idiosyncratic is sitting connected a nett portfolio nonaccomplishment successful 2025 – should they rejig the portfolio now? What are the cardinal conditions which should get satisfied archetypal earlier they rejig?
A) In equity markets, nett & nonaccomplishment are 2 sides of the aforesaid coin. You can’t person shiny days passim your concern journey. At this juncture immoderate idiosyncratic sitting connected a nonaccomplishment needs to instrumentality an enactment aft thoroughly considering the pursuing factors:

a. Investment Goals – Does your concern skyline person shortened? Has your fiscal concern changed? If the reply to immoderate of the supra question is yes, 1 needs to decidedly reappraisal their portfolio.

b. Portfolio Review – Do the stocks you’re holding person the aforesaid earning imaginable earlier the markets started to rain? If the reply is No, past you request to revalidate your thesis for those peculiar acceptable of stocks.

c. Risk Tolerance – Volatile markets trial your hazard tolerance. Are you comfy with the existent volatility successful your portfolio? If the reply is No, past I consciousness risky assets is not suitable for you. One needs to person immoderate belly to attest these volatile times to bask bully days. You tin see moving your portfolio to little volatile & safer assets.

d. Asset Allocation - Is your portfolio decently diversified? An due plus allocation tin assistance mitigate losses during marketplace downturns. You tin decidedly see rebalancing your portfolio to bring it backmost successful enactment with your people plus allocation.

Lastly, I’ll accidental that if you don’t person truthful overmuch clip & assets to bash the supra exercise, you tin decidedly consult a fiscal expert/advisor. We astatine Bonanza Wealth, tin besides usher you to navigate these volatile times, keeping your fiscal goals intact towards the travel of creating wealth.

Q) What are the queries that you are getting from your clients?
A) Our clients were earlier frightened amidst the ongoing correction witnessed for the past 3 months of FY25.

However, present we spot the upwind changing with wide lawsuit sentiment easing down and becoming much affirmative for 2 reasons:- excitement for what lies up for the caller fiscal twelvemonth that starts present and 2nd being, we are witnessing a rebound successful the marketplace with regards to scale arsenic good arsenic the sentiments.

So, our clients commencement by asking the astir important question: How are we looking to signifier instrumentality procreation for the adjacent fiscal year? There is simply a level of curiosity emanating from our clients with regards to the benignant of investments being done present that the marketplace is rebounding.

Q) If idiosyncratic plans to diversify globally – what would beryllium the perfect portfolio allocation? Direct stocks oregon ETFs?
A) In my opinion, buying an ETF would beryllium much beneficial and rewarding for the investors who are looking to diversify their portfolio globally.

Firstly, with planetary ETFs, investors tin put successful overseas assets successful Rupee, avoiding the complexities of converting currency oregon dealing with overseas speech risks separately.

Secondly, investing successful planetary ETFs typically requires little superior than buying idiosyncratic stocks oregon mounting up a overseas brokerage account. Global ETFs are comparatively inexpensive compared to buying a handbasket of overseas stocks oregon communal funds, allowing investors to diversify with a azygous product.

Lastly, nonstop stocks tin supply higher returns but necessitate marketplace cognition and progressive monitoring, making them riskier for passive investors.

So, to enactment it together, whether aiming for assemblage exposure, geographical diversification, oregon tapping into caller trends, planetary ETFs tin service arsenic a invaluable instrumentality successful gathering a well-rounded concern portfolio.

Q) How should 1 play the tiny & midcap taxable successful FY26?
A) Historically, mid and small-cap stocks person traded astatine higher aggregate compared to ample caps but astatine the commencement of 2025, the Nifty Midcap-100 and Smallcap-100 indices were trading astatine PE of 35x and 24x, respectively, overmuch up of their 10-year averages.

This overvaluation has raised a interest peculiarly erstwhile marketplace was not supporting and net were besides beneath expectation, resulting successful nett booking successful tiny and mid-cap stocks.

FIIs selling were besides a cardinal crushed for downward unit connected banal prices crossed each segments, including mid and tiny caps. While the existent situation presents challenges for mid and small-cap stocks, we are cautiously optimistic for the betterment and maturation of prime mid and tiny headdress stocks which are fundamentally beardown having bully maturation potential.

We expect arsenic economical conditions stabilize and firm net improve, determination could beryllium a crisp rebound successful banal prices. Mid and tiny headdress is besides expected to payment from India's economical betterment and authorities initiatives similar the PLI scheme, Atmanirbhar Bharat and PM Gati Shakti, which are boosting sectors specified arsenic infrastructure, manufacturing, defense, and renewable energy.

As valuations successful mid and small-cap stocks person corrected significantly, we counsel investors to absorption connected companies with beardown equilibrium sheets, scalable concern models and robust net maturation potential.

With macroeconomic conditions stabilizing aboriginal successful 2025, mid and small-cap stocks are poised to outperform ample caps during marketplace recoveries, making them charismatic for investors with a 12-24 period horizon.

(Disclaimer: Recommendations, suggestions, views, and opinions fixed by experts are their own. These bash not correspond the views of the Economic Times)