Which mutual funds will do better after the polls?

The markets will now gain a lot of confidence from the state election results, which overwhelmingly confirm the continuity of the government in the 2024 elections as well.

India is today one of the fastest-growing economies in the world, as most macro data suggests. Therefore, this win strengthens expectations of the continuity of policy reforms that can drive growth higher. Furthermore, global trends are slowly turning optimistic, including early signs of foreign investors making a comeback in domestic markets. All these are major factors that will drive upward movement going forward.

Make In India, the infrastructure theme is expected to gain further momentum. So, schemes with a higher allocation to manufacturing, infrastructure, power, especially renewable energy, and defence, should perform reasonably well.

Heightened economic activity will also lead to further growth opportunities for banking and NBFC stocks.

How should my portfolio be positioned with the incoming national elections early next year?

—Name withheld on request

The market capitalization of listed companies on the NSE has surpassed $4 trillion ( ₹334.72 trillion) mark, and valuations are reasonable compared to the historical average.

Despite the markets reaching new highs supported by robust earnings growth, the global geopolitical environment remains uncertain. Following the unexpectedly favourable state assembly election results for the ruling party at the Centre, while valuations are reasonable compared to historical averages, investors should still exercise caution and align their equity exposure with both short and long-term goals.

It is advisable for investors to maintain a three to five-year horizon to fully capitalize on the positive assembly results and the upcoming national elections, which are expected to favour the ruling party.

Nehal Mota is co-founder and CEO, Finnovate