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India is in a structural long-term bull market and there is a case for an asset allocation shift to equities in the coming months, says a report.
According to Sanctum Wealth Management Investment Outlook Report for 2017, aimed at identifying key investment themes that will shape investors' portfolio performance in the coming year, equities are the most attractive asset class for investments with a horizon for three plus years.
"Earnings reports in the recent quarter have been surprisingly good and we expect earnings of Nifty companies to grow over 17 per cent for the whole of 2017-18," said the report.
Despite a "painful" October-December 2016, a whole host of stocks delivered stellar returns in 2016, while the Index delivered a sub-par 3.0 per cent return.
"With lower bond yields, fixed deposit rates, falling real estate and gold prices, equities are the most attractive asset class for investments with a horizon for three plus years," the report added.
Sanctum further said the wealth creation that lies ahead will "dwarf" the wealth creation we have witnessed in the past decade.
Post demonetisation, Sanctum said it favours large caps as quality names were sold off. "The growth cycle continues and for long-term investors looking to maximise returns, midcaps should remain a core exposure," it said.
Sector wise, it is positive on private sector banks, select NBFCs due to a good growth outlook.
"We are positive on autos, select utilities, and power, and long term positive on pharma, but cautious in the shorter term around an unfriendly global export environment, positive on speciality chemicals and materials," it added.
Some of the key investment themes in domestic and global markets and the investment outlook for the year 2017 include, crude oil, rising geo-political risks, demonetisation and GST among others.


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