"While the market is in a fog, you need to have a cache of cash": how is Mark Mobius investing now?

Mark Mobius calls himself the "Indiana Jones of emerging markets investing": in a 40-year career that has taken him from managing $50 billion in assets at Franklin Templeton to his own investment firm, Mobius Capital Partners, he has always preferred personal assessment of companies to desk analysis.

In an interview with The Economic Times, Mobius shares his strategy for 2026. Oninvest has collected the legendary investor's key answers on why India is taking over the leadership from China, how the Fed will behave and what part of the portfolio should be kept in a cache.

The market situation remains highly ambiguous and murky, largely due to the serious uncertainty in the US. I advise investors not to leave the market completely, but to be cautious and always have some money on hand.

I would say that the main focus right now should be on capital preservation. Investors should keep about 20% in cache or just have a liquidity reserve. In our portfolio, the cache share is just about 20%. In addition, we use a lot of instruments to hedge our investments, we put put options to protect ourselves from losses in case prices fall.

About 30% of our portfolio is in India and the rest is allocated to other emerging markets. We buy shares of American companies whose business is closely connected with such countries. US corporations are very active in emerging markets, and the US stock market is as liquid as possible.

India is likely to perform better for a number of reasons. The situation here is favorable: not only because of reforms, but also because more and more international companies are shifting their purchases to India. Many problems have accumulated between China and the US, so investors are now wary of Beijing. At the same time, China cannot be ignored. Both markets are important, but India has higher growth potential. The figures confirm this: the pace of development there is much more serious. Population growth and the departure of customers from China to India - all of this is having an effect.

Indian returns are likely to moderate to around 12-15% in 2026. Investors will behave more cautiously and a lot will depend on the situation in the US. The US economy is huge and affects everyone. In addition, the dollar's position has not been strong lately.

The market is a bit overheated. A lot of people are jumping into AI without really looking at it - as they have in past tech booms. AI itself is a terrific technology, and it's with us for a long time (I use it almost every day myself), but the valuations of companies are probably too high. It is worth being cautious in this sector.

We focus on companies that use technology. And these are not necessarily those who create them, but rather those who apply them on a large scale in their business.

The Fed will ease policy and cut rates. This is inevitable. It is not a fact that the market will immediately go into a boom, but the regulator will definitely become more loyal. I think the Fed will cut rates twice in 2026 - 25 basis points each time. It could go out up to 50 points in total - it will all depend on how the market behaves. Trump will push for sharper steps, but he is bound hand and foot by Congress and the courts. His options are not limitless.

The dollar is likely to remain at current levels: it is unlikely to fall much, but we should not expect any significant growth either. Bond yields will follow rates downward, so those who hold high-interest securities will benefit.

Most likely, gold will hold at the current level, it is unlikely to grow much. It has already gained a lot. I am not getting out of this asset, because the money supply decides everything. During the pandemic, its volume jumped by 20-30%, and that's what pushed prices up. Now the growth has slowed down to 10%, so I don't expect much potential for a surge, but it is still worth keeping gold in your portfolio.

This article was AI-translated and verified by a human editor