Largecap equity funds remain suitable for conservative and moderate risk-taking investors seeking relatively stable returns.
Largecap equities are less volatile than mid- and smallcap stocks, making them suitable for risk-averse investors.
Flexicap fund performance depends heavily on the fund manager's decisions.
'The problem is not just slower growth, but also the quality of growth.'
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.
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.
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).
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.
'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.
Worries about global politics and trade are pulling the Nifty 50 down. Experts say the market could drop further low.
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.
'As we navigate uncertain waters, a conservative approach to largecap investing could provide a strategic advantage.'
2025 marked a shift in investor preference when it comes to MF schemes.
'The volatility in the stock markets since September 2024 has hurt the pace of accretion of new investors.'
Investors seeking higher returns at relatively higher risk should consider allocation to smallcap equity funds.
'Stopping now would defeat the core purpose of an SIP, which is to average out the purchase cost over market cycles.'
The 2025 contraction marks the steepest decline in both the number of billionaire promoters and their aggregate wealth since 2012.
Passive funds tracking the National Stock Exchange Nifty Next 50 Index have seen their assets under management (AUM) more than double in the past year. The index's growing popularity can be attributed to its robust 50 per cent return over the same period. Currently, the AUM of funds tracking the Nifty Next 50 index stands at nearly Rs 30,000 crore.
Investing in gold trumped most other asset classes in terms of compounded annualised returns over the long term, suggests a report by FundsIndia.
The majority of active largecap funds are set to outperform for the second year in a row in 2024, thanks to the strong performance of their midcap and smallcap allocations.
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 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.
The market capitalisation (mcap) cutoff to qualify for mutual funds' (MFs') largecap universe is likely to go up for the fifth consecutive time to touch the Rs 1 trillion mark for the first time. A fresh list of largecap, midcap, and smallcap stocks is set to be released by the Association of Mutual Funds in India (Amfi) in the first week of January.
rediffGURU T S Khurana answers readers' personal income tax queries
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.
Unless the primary market momentum slows, smallcap stocks will stay subdued.
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.
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.
New investors or those with lower-than-planned exposure should add US-oriented funds through SIPs.
This marks a rebound after more than two years of underperformance during a strong rally in smallcap stocks.
'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.'
10 largecaps stocks which stand to gain from the Budget.
Investors having a moderate-risk profile can use these funds in their retirement portfolios.
Net inflows into equity mutual funds (MFs) moderated for the second straight month in September, declining 9 per cent during the month to Rs 30,422 crore. The slowdown came as redemptions from active equity schemes rose 30 per cent month-on-month (M-o-M) to a one-year high of around Rs 36,000 crore.
'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.'
With gains of over 28 per cent, Hero MotoCorp has emerged as the best-performing largecap automotive stock over the past three months. The rally has been driven by an improved outlook for the rural segment, higher demand during the ongoing festival season, and rising affordability following cuts in goods and services tax (GST) rates.
'The primary market's rhythm mirrors investor confidence. While sentiment may appear cautious, it reflects maturity, not weakness.'
'Defence, capital goods, engineering, capital market-related stocks, autos, and cement sectors are my bullish bets for Samvat 2082.'
The buyback comes at a time when Infosys shares have declined 19 per cent so far this year.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances