'Retail portfolios were going nowhere even as headline indices moved higher, prompting investors to sell holdings and shift money to IPOs, attracted by listing-day gains.'
Indian equity investors experienced a significant loss of 16.32 lakh crore due to a two-day stock market decline fueled by escalating geopolitical tensions involving the US, Israel, and Iran.
The share of investments held by the top 10 investors across smallcap mutual fund schemes has been on a decline, falling to a 14-month low in March 2025, shows an analysis of data from the Association of Mutual Funds in India (Amfi). The median smallcap scheme has 2.03 per cent of its investments coming from the top 10 investors, compared to 2.43 per cent a year ago.
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Younger investors with long investment horizons may continue their SIPs.
'The problem is not just slower growth, but also the quality of growth.'
Indian equities on Dalal Street saw volatility as global market trends and fresh tariff concerns linked to Donald Trump impacted investor sentiment. Track Sensex, Nifty50 movement and key market drivers for Feb 24, 2026.
Equity benchmark indices Sensex and Nifty experienced a significant decline, primarily driven by a selloff in IT stocks due to concerns about AI disruption and renewed worries over global trade.
Retail investors' equity portfolios have significantly underperformed benchmark indices over the past 16 to 18 months.
The BSE Sensex plummeted 1,236 points, wiping out nearly Rs 7 lakh crore in investor wealth, driven by escalating tensions between the US and Iran and subsequent market selloff.
2025 marked a shift in investor preference when it comes to MF schemes.
Benchmark stock indices Sensex and Nifty closed on a flat note in a choppy session on Wednesday as gains in PSU banks and auto shares were offset by losses in IT stocks.
Benchmark BSE Sensex fell 558 points on Thursday amid heavy selling in IT shares, as concerns over AI-led disruptions and waning hopes of a Fed rate cut after firm US economic data weighed on investor sentiment.
Market sentiment is likely to remain cautious as investors position themselves for the upcoming Union Budget and the US Fed's interest rate decision, where expectations are muted.
Stock markets closed higher for the second straight session on Tuesday, driven by gains in bank, IT and capital goods shares.
Overlap refers to the same stocks appearing across fund portfolios.
The 2025 contraction marks the steepest decline in both the number of billionaire promoters and their aggregate wealth since 2012.
'Stopping now would defeat the core purpose of an SIP, which is to average out the purchase cost over market cycles.'
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 recent selloff in the Indian equity market has been far more painful for mid and smallcap stocks compared to largecap stocks. The benchmark BSE Sensex is now down 9.5 per cent from its record monthly closing of 84,300 at the end of September last year. In the same period, the BSE MidCap has lost 17 per cent of its value, while the BSE SmallCap has corrected by 17.1 per cent.
The last time these two indexes recorded a negative performance on a calendar year basis was in CY19.
Investing in gold trumped most other asset classes in terms of compounded annualised returns over the long term, suggests a report by FundsIndia.
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).
'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.'
Retail investors are moving away from a buy-and-hold approach and towards more informed short-term positioning, recent investment patterns show.
'Investors may have made money in mid and smallcaps due to market momentum, but now they need to focus on fundamentals.'
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.
Worries about global politics and trade are pulling the Nifty 50 down. Experts say the market could drop further low.
Largecap equities are less volatile than mid- and smallcap stocks, making them suitable for risk-averse investors.
'The volatility in the stock markets since September 2024 has hurt the pace of accretion of new investors.'
'When markets go into a budget with excessive optimism, the risk of disappointment is higher.'
The number of rights issues more than doubled and hit a 28-year high in 2025, even as qualified institutional placements (QIPs) shrank amid a broader market correction and the Securities and Exchange Board of India's (Sebi's) revised framework for rights issues.
The post-Covid euphoria surrounding direct equity investing has ebbed in 2025. Individual investors have turned net sellers in the domestic equity market, pulling out about 8,461 crore so far this year - a sharp reversal from the record purchases seen in 2024, according to a report by the National Stock Exchange of India (NSE).
Among Sensex firms, Tata Steel, Eternal, UltraTech Cement, Larsen & Toubro, Maruti and Bharti Airtel were the major gainers. However, Hindustan Unilever, Sun Pharma, ITC and Asian Paints were among the laggards.
Largecap equity funds remain suitable for conservative and moderate risk-taking investors seeking relatively stable returns.
'Trading without strict position sizing, stop-loss discipline, or a clear exit plan almost guarantees losses.' 'Chasing tips, reacting to intraday noise, or assuming frequent trading improves outcomes are equally damaging habits.'
The milestone crowns a record year for the domestic primary market where IPO mobilisation is set to cross Rs 1.7 trillion.
Among Sensex firms, Tata Steel, HCL Tech, Bajaj Finance, Bajaj Finserv, Bharat Electronics and Eternal were the major laggards. However, Maruti, Mahindra & Mahindra, Tata Motors Passenger Vehicles and ITC were among the gainers.
Equity markets fell on Monday, with benchmark indices recording their worst session in over two months amid caution ahead of the US Federal Reserve's (Fed's) policy announcement and renewed uncertainty over the US-India trade deal. Sustained selling by foreign portfolio investors (FPIs) also weighed on sentiment.
While selecting a smallcap scheme, go with one that has a good track record and a stable fund manager.
