There are two key drivers for the Equity Market in 2016. One is the general improvement in the economy. The other is reform measures by the government. Both of these are expected to drive the markets 10-15% higher. So, Equity Funds could be a good option.
When the economy does well, corporate profits grow at a faster rate. Analysts expect profits to grow at a double-digit rate in 2016. Stocks of such companies could jump. Growth Fund Managers could be best at identifying such Stocks
Some sectors do better than others during economic growth. These are usually sectors related to luxury goods like Auto or investment-related industries like Infrastructure. Many Sector Funds deal specifically with these Stocks
Most analysts expect the Reserve Bank of India (RBI) to cut interest rates in the year to come. Stocks of financial companies, realty developers and GILT/Bond Funds tend to do well in an environment when interest rates are on the fall.
The yellow metal has not given great returns in the past few years. This trend could continue in 2016. Most analysts are bearish about the price of Gold given the widespread commodity rut in the global markets.