For investors deciding how much of their portfolio to allocate to gold, the stance comes after a period of exceptionally strong performance.
Bloomberg data cited in the presentation show that gold gained 63% between January and December 2025. In comparison, it has returned 2% between January and August 2026. The presentation also cautions that past performance may not sustain in the future.
What is Kotak’s current view on gold and equity?
As of August 31, 2026, Kotak’s asset-class stance is neutral on equity, overweight on gold and tactical on silver. The view is based on Kotak Mahindra Asset Management Company’s internal research and portfolio data as of August 31.
For investors, this does not mean the fund house is suggesting that gold should replace equity. The outlook instead looks at gold as one component of a broader asset allocation alongside equity and debt.
What does a gold allocation add to a portfolio?
The presentation gives one illustration using a portfolio comprising 55% Nifty 50 TRI, 30% Nifty Short Duration Debt Index and 15% domestic gold.
The combination has outperformed the Nifty 50 TRI over some of the periods shown in the presentation. Over five years, the portfolio returned 12.23%, compared with 10.93% for the Nifty 50 TRI. Over three years, it returned 11.20%, against 7.33% for the index. Over seven years, both returned 13.50%, while over 10 years the portfolio returned 11.96%, compared with 11.95% for the Nifty 50 TRI.
The more recent SIP illustration also shows the potential difference between a diversified allocation and an equity-only benchmark. A monthly SIP of ₹10,000 in the 55% equity, 30% short-duration debt and 15% gold combination had a one-year return of 3.98%, compared with -3.01% for the Nifty 50 TRI in the same comparison.
However, this should not be read as evidence that gold alone outperformed equity. The portfolio also has a 30% allocation to short-duration debt, so its performance reflects all three asset classes.
Why is Kotak overweight on gold?
The outlook highlights a number of developments in the gold market. Its presentation points to increased gold buying by central banks and separately highlights China’s gold purchases. It also notes that US-dollar gold prices had corrected from their peak as of August 31.
That makes the current stance notable because it comes despite gold’s 63% gain in 2025. The report is therefore not simply basing its gold allocation on the metal’s recent returns.
What about equity valuations?
Kotak’s neutral equity stance comes against a mixed valuation picture. The September outlook says the Nifty 50 is trading around its long-term average, while mid- and small-cap stocks are trading at a premium to their respective long-term averages.
The presentation puts the long-term average P/E at 18.8 times for the Nifty 50, 24 times for the mid-cap index and 17.6 times for the small-cap index.
At the same time, the outlook points to continued earnings support. It cites corporate profits at 5.2% of GDP in FY26, an all-time high according to Motilal Oswal data, while its earnings assessment points to growth across most sectors over FY2027-28.
What should investors take from this?
The key takeaway is not that investors should choose gold over equity. Rather, Kotak’s latest asset-allocation view puts gold in the overweight category even after its exceptional 2025 performance, while equity remains neutral.
For retail investors, the distinction matters. Gold’s 63% gain last year does not by itself mean similar returns should be expected going forward. At the same time, the portfolio example in the presentation shows why an allocation to gold can be considered alongside equity and debt rather than viewed only as a standalone return bet.
