Does your portfolio needs a global hedge in a ‘weaponised’ world?

We are living through geopolitical changes that have not been seen in a century. From the “weaponisation” of economic equities to the inadvertent caught-on-camera admissions by global leaders that a new world order is being driven forward, the rules of the game are changing. For the Indian investor, these are direct signals to rethink how and where their money is parked.

Experts at the latest Mint Horizons masterclass held in Gurugram, presented in collaboration with Appreciate, shared this, and many more insights on the new global order and how that should make us rethink our investing strategies. One of the sessions at the event, an interview with Arun Singh, former Indian Ambassador to the US, Israel, and France, served as a strategic roundup of how shifting international relations and technological disruptions are dismantling traditional investment playbooks. The session was moderated by Abhishek Singh, Associate Editor at LiveMint.

The end of globalisation and the rise of ‘Might is Right’

Arun Singh offered his assessment of the current global climate and said that the era of cloud castle notions about a rules-based order has effectively ended, replaced by a world where economic equities are leveraged as tools of statecraft. According to him, the United States itself has moved away from traditional globalisation, focusing instead on bringing manufacturing back to its shores and securing technological leads in sectors like Artificial Intelligence, where over $700 billion in investment is already planned.

This shift has implications for how capital flows across borders. He highlighted that as the US weight in the global economy has shifted from 50 per cent post-WWII to roughly 25 per cent today, the strategy of major powers has become one of hedging and securing supply chains. This ‘weaponisation’ of trade means that investors must now factor in the political unpredictability of their chosen markets, looking toward diverse regions like Europe to find independent technological partnerships that can withstand the friction between major powers.

“Economic relationships are being weaponised and we are now living in a world where might is right. Investors must basically fasten their seat belts and brace for the change,” he said.

The case for global diversification

Despite these massive global movements, the average Indian investor remains deeply insulated. Neil Borate, editor-in-chief of thefynprint and former personal finance editor at Mint, said that while India accounts for only about 3 per cent of the world’s stock market capitalisation, local portfolios are often 99-100 per cent domestic. This concentration leaves investors exposed to local volatility while missing out on global growth cycles.

Subho Moulik, Founder and CEO of Appreciate, felt that the days of needing complex advisory routes to invest globally are over, as direct access to US markets now allows investors to participate in global innovation themes like AI infrastructure and services.

Moulik spoke about how global investing is not just about chasing higher average returns but about reducing volatility through geographic variety. The consistent decline of the rupee against the dollar further acts as a natural hedge, adding a layer of currency returns to the underlying asset growth. By diversifying, investors can capture the growth of global giants that operate across multiple trading cycles, ensuring their portfolios are of higher value in the long run regardless of domestic market doldrums.

“If you like your investment portfolio to be higher value two years from now, then you should diversify. It gives you lower volatility with higher returns when you combine US and India,” said Moulik.

Domestic resilience and the new meritocracy

Turning the focus to the Indian market, Dhirendra Kumar, Founder and CEO of Value Research, spoke about a transformation in domestic investing behaviour. Despite heavy selling by foreign institutional investors, the Indian market has remained resilient due to a largely democratised retail base. The surge in Systematic Investment Plans (SIPs), which now consistently see over ₹33,000 crore in monthly inflows, has created a sustainable foundation for the market. Kumar pointed out that structural reforms like GST have shifted the rewards in the Indian economy, making it more profitable for entrepreneurs to run transparent and honest businesses than to operate in the shadows.

However, Kumar cautioned that this domestic strength should not be a reason to ignore the rest of the world. He urged investors to remain meritocratic, recognising that India represents only a small fraction of the global equity universe. By following simple principles like starting early, using direct plans and maintaining fixed income as a shock absorber, investors can withstand the turbulence of a world in transition. The ultimate risk, according to Kumar, is not market volatility, but the prospect of outliving one’s savings by failing to move beyond low-yield, traditional insurance-cum-investment products.

“India does not have a monopoly on great businesses. We are only 5 per cent of the global equity universe and the most important thing is to invest in great businesses and sleep over it,” Kumar said.

Note to Readers: Mint Horizons Gurgaon edition is presented in partnership with Appreciate.