'The problem is not just slower growth, but also the quality of growth.'
'As re-industrialisation gathers pace across regions like Asia, Europe and the US, a wide range of products and inputs will see demand.'
Passive funds have resumed gaining ground in the mutual fund (MF) industry after a slowdown in 2024, with their share of assets under management (AUM) reaching an all-time high in 2025. The surge has been driven largely by robust inflows into gold and silver exchange-traded funds (ETFs).
'Auto, pharma, and industrials have delivered well in the recent quarter, while businesses like quick-service restaurants, consumer staples, and durables have underperformed in volume growth.'
Global risks include a potential delay in the US-India trade agreement, the possibility of a sharp correction in US equity markets, and renewed geopolitical tensions.
'The next phase of India's IPO cycle will be defined by quality, pricing discipline and investor selectivity.'
10 largecaps stocks which stand to gain from the Budget.
The India-US trade deal has offered a much-needed breather for the Indian information technology (IT) industry, which has been grappling with global macroeconomic uncertainty and subdued client spending over the past few years.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
Mutual funds' largecap investment universe is expected to see seven changes in the upcoming stock reclassification exercise by the Association of Mutual Funds in India (Amfi). According to a report by IIFL Securities, Hero MotoCorp, Zydus Lifesciences, JSW Energy, NHPC, Bharat Heavy Electricals, Bosch and Samvardhana Motherson are expected to earn upgrades in the revised list of largecap, midcap and smallcap stocks set to be released in the first week of July. Amfi revises the list at the start of January and July every year based on the previous six-month performance of the stock.
Net inflows into two of the 'lower risk' equity funds - largecaps and flexicaps - outpaced the flows into smallcap funds during January 2024 for the first time in 17 months. This is an indication that investors may now be shifting to the relatively safer largecap stocks after a sharp run up in the mid and smallcap spaces. Net inflows into large and flexicap funds were at Rs 3,730 crore last month against Rs 3,260 crore by smallcap schemes.
'Stopping now would defeat the core purpose of an SIP, which is to average out the purchase cost over market cycles.'
The rally in the equity markets in the second half of 2023 has led to a sharp surge in the cutoff for stocks to qualify as largecaps and midcaps. On the latest list put out by the Association of Mutual Funds in India (Amfi), the smallest largecap stock now has a market capitalisation (m-cap) of Rs 67,000 crore, 35 per cent higher than in July 2023. In the case of midcaps, the cutoff has surged 26 per cent to Rs 22,000 crore.
'The bigger unknown remains global geopolitics, which is inherently unpredictable, including developments in our neighbourhood.' 'Another concern is the increasing tilt of government finances towards welfare subsidies, especially at the state level.' 'This could constrain capital expenditure, which is critical for long-term growth.'
Fund managers advise conservative investors to cap midcap exposure at 10 to 15 per cent of their equity portfolio.
Investors seeking higher returns at relatively higher risk should consider allocation to smallcap equity funds.
'Investors should focus on largecap funds, flexicap funds, business cycle funds, or hybrid-category funds.'
Most first-time investors may be better served by diversified options such as flexicap or multi-cap funds, which already hold pharma and healthcare stocks.
Shares of Reliance Industries Limited (RIL) tumbled on Tuesday, posting its biggest single-day decline in 19 months, amid controversy over its purchase of Russian oil and profit-booking after recent gains.
'The volatility in the stock markets since September 2024 has hurt the pace of accretion of new investors.'
2025 marked a shift in investor preference when it comes to MF schemes.
These stocks offer the best combination of maximum 'buy' recommendations from brokerages and share price upside over the next 12 months.
Multi-asset allocation funds (MAAFs) have emerged as strong performers among mutual funds (MFs), rivalling medium-term returns from traditional equity categories while maintaining a lower risk profile. Over the past three years, average returns for this segment have surpassed those of flexicap and largecap funds, for both lump sum and systematic investment plan (SIP) investments.
Worries about global politics and trade are pulling the Nifty 50 down. Experts say the market could drop further low.
'Investors should consider small and midcaps only if they can handle volatility and have a longer investment horizon.'
'Midcap and smallcap indices are trading in the expensive zone.'
Despite trailing the benchmark Nifty 50, small and midcap (SMID) stocks appear pricey on a 12-month forward price-to-earnings (P/E) basis. The Nifty trades at roughly 21x forward earnings, compared with around 28x for both the Nifty Smallcap 100 and Nifty Midcap 100 indices.
The 2025 contraction marks the steepest decline in both the number of billionaire promoters and their aggregate wealth since 2012.
Investing in gold trumped most other asset classes in terms of compounded annualised returns over the long term, suggests a report by FundsIndia.
This marks a rebound after more than two years of underperformance during a strong rally in smallcap stocks.
Following the sharp run in markets, valuations across the board have become elevated. The National Stock Exchange Nifty50 Index now trades at a 12-month trailing price-to-earnings (P/E) multiple of 24.3 times, 18 per cent higher than this year's low of 20.5 times. The valuation expansion in the broader markets has been sharper.
Indian information technology (IT) services companies reported lacklustre growth in the second quarter, at a time when the macroeconomic environment did not deteriorate further. HCLTech emerged the best performer among India's top six IT services firms with a constant-currency growth rate of 4.6 per cent, even though uncertainties continued to persist.
Fund managers are divided on the prospects for beaten-down information technology (IT) stocks, reflected in the wide variance in equity mutual funds' (MFs) sector exposure. An analysis by Nuvama Alternative & Quantitative Research shows that while six large fund houses were overweight the sector relative to its weight in the Nifty 200 index, five were underweight as of October 2025. UTI MF had the highest exposure at 17.8 per cent, while SBI MF sat at the bottom with 5 per cent.
The Reserve Bank of India (RBI) on Friday delivered a 25 basis point (bps) repo rate cut analysts expected, driven by the strong 8.2 per cent GDP growth in the September quarter. However, analysts do not expect a runaway market rally as the impact of US tariffs continues.
Despite multiple headwinds at the start of 2023, the Indian markets delivered a strong performance, posting 19-20 per cent growth for the year. Even as new records were set, investor sentiment remains strong going into 2024, given the lower inflation, expectations of steady to lower interest rates, higher economic growth, and strong inflows. However, the overriding concern for most brokerages is valuations.
Unless the primary market momentum slows, smallcap stocks will stay subdued.
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Investors having a moderate-risk profile can use these funds in their retirement portfolios.
New investors or those with lower-than-planned exposure should add US-oriented funds through SIPs.
'Earnings growth will be the main driver of India's market in 2026, with profits expected to rise 9% to 10% in H2 FY26 and accelerate to 12% to 15% in FY27.'
