RBI’s 25-basis-point repo rate hike has changed the near-term outlook for mutual fund investors. Experts advise continuing SIPs, staggering lumpsum investments and favouring quality, shorter-duration debt funds. In equities, large caps remain preferred for core allocations, while investors should be selective with small-cap and thematic exposure amid policy uncertainty.
Multi-cap mutual funds have outperformed flexi-cap funds across short- and long-term horizons, but investors continue to favour flexi-cap schemes. Experts attribute the performance gap to multi-caps’ mandatory exposure to mid- and small-cap stocks, while flexi-caps offer greater flexibility and a relatively smoother risk profile. Should investors switch categories, or stick with their existing allocation?
The Nippon India Taiwan Equity Fund has achieved impressive returns exceeding 118% over the last year, driven largely by Taiwan's booming technology and semiconductor industries. This fund targets long-term capital appreciation via equity investments. However, investors should temper their expectations due to increasing valuations, emphasizing the necessity for a diversified portfolio and thoughtful investment strategies for international allocations.
In September, mutual fund investors encountered significant setbacks as many technology-focused funds saw sharp declines. The Nifty 50 index fell by 5.56%, leading to nearly 95% of the evaluated funds posting negative returns, with many suffering losses exceeding 9%. To navigate this turbulence, experts suggest that investors should prioritize diversification and maintain balanced asset allocations, employing a disciplined strategy toward equities during this volatile market phase.
In the last six months, all 36 smallcap mutual funds have achieved impressive double-digit returns, averaging around 25.20%. This indicates a robust recovery from prior dips. Financial experts advise investors to keep up their SIPs if they can handle the volatility. With smallcap valuations currently elevated, future success will hinge on sustained earnings growth.
The BSE Sensex has experienced a notable drop, raising concerns among investors. Financial analysts recommend avoiding attempts to time the market and encourage maintaining systematic investment plans (SIPs). For those with a long-term outlook, gradually increasing equity allocations is advisable. Additionally, rebalancing portfolios during market corrections is an effective strategy for achieving target asset allocations. Flexi-cap and multi-cap funds may provide a level of stability for fresh investments.
Defence sector funds have delivered strong returns in 2026, averaging nineteen percent year-to-date. HDFC Defence Fund led this category with a notable twenty-four point five one percent gain. Experts cite increased defence spending and government policies supporting domestic manufacturing. Investors should review their existing allocation and avoid chasing recent sharp rallies. A five percent allocation cap is suggested for most investors in this sector.
Mutual funds raised their healthcare allocation for the fourth straight month in August 2026 to 8.4%, the highest in 71 months. Experts attribute the increase to resilient demand, earnings visibility, structural growth and opportunities in hospitals, specialty pharma and healthcare outsourcing. However, they caution investors against chasing the rally and suggest focusing on valuations, earnings quality and long-term prospects.
Eleven equity mutual fund schemes had an NAV of over Rs 1,000 as of September 14, 2026, with all delivering more than 17% CAGR since inception. Ten of these schemes have been in the market for over 25 years. The list spans five categories, including mid cap, flexi cap, ELSS, large cap and large & mid cap funds.
Bank of India Small Cap Fund delivered the highest CAGR of 25.21% over seven years among equity funds, excluding sectoral and thematic schemes, according to ETMutualFunds analysis. The fund outperformed peers with seven-year returns ranging from 9.14% to 22.97%. Launched in December 2018, the scheme has also received four-star ratings from both Value Research and Morningstar.
Gold prices and Gold ETFs have delivered strong returns, but experts caution investors against chasing recent performance. While central bank buying, geopolitical risks and diversification benefits support gold’s medium-term outlook, its lower Sharpe ratio highlights its cyclical nature. Experts recommend treating gold as a portfolio diversification tool and maintaining an appropriate allocation rather than increasing exposure solely because prices have risen.
Since their inception, Specialised Investment Funds have garnered considerable attention from investors looking for more than what typical mutual funds provide. These funds are seen as an excellent option for satellite allocation, helping to diversify investment strategies. However, experts advise investors to carefully assess their risk profile and ensure that SIFs align with their overall portfolio. Relying solely on recent performance metrics for decision-making is not advisable.
In the past six months, smallcap mutual funds have delivered excellent returns, prompting investors to reassess their future investment plans. Experts recommend maintaining a careful allocation to small-cap funds, suggesting that any additional investments should be made gradually in the forthcoming months. Investors should prioritize consistent and methodical allocation instead of impulsively pursuing market rallies.
HSBC Midcap Fund achieved a remarkable 24% return over three years. A Rs 10,000 monthly SIP grew to over Rs 2 crore since inception. The fund manager emphasizes bottom-up stock selection and long-term growth potential. Experts attribute recent outperformance to strong stock picking within key sectors. Investors are advised to focus on long-term strategy and portfolio suitability.
International mutual funds have outperformed domestic peers across multiple time horizons, prompting investors to reassess overseas allocations. With some fund houses resuming subscriptions after earlier restrictions, experts recommend staggered investing rather than market timing. They favour international exposure for diversification, currency hedging and access to global sectors, while cautioning against chasing recent returns and recommending disciplined, strategic asset allocation.
Despite large-cap mutual funds showing a decline this year, mid and small-cap funds have proven to be winners. Experts advise investors to rebalance their portfolios by taking profits from the outperformers. Now is the time to reconsider allocations, as large caps provide better valuation and protective measures. Flexi-cap funds are suggested as a strategic option for a broader range of investors.
Gold and silver ETFs fell sharply on Monday, with some funds declining up to 8% as precious metal prices extended their losses. Rising expectations of a US Fed rate hike, profit booking and a stronger dollar weighed on sentiment. Experts advised investors against panic selling and suggested rebalancing or staggered buying.
In August, multiple international equity mutual funds posted impressive returns surpassing ten percent, with the Nippon India Taiwan Equity Fund and DSP World Gold Mining Overseas Equity Omni FoF leading the pack. Analysts attribute these robust performances to fluctuations in overseas markets and currency values. It's essential to remember that a single month's performance may not signify an overarching trend.
This Raksha Bandhan 2026, consider the thoughtful gift of a mutual fund SIP to nurture long-term wealth. This investment approach fosters consistent saving, allowing your funds to compound impressively over time. A small monthly contribution can accumulate into a substantial amount in fifteen years. Selection of the appropriate fund type should reflect your sibling's financial goals and current investments.
ITI Small Cap Fund topped the three-year return chart with a 25.19% return, outperforming its benchmark and category average. While strong stock selection drove much of the outperformance, experts caution investors against extrapolating recent gains. With small-cap valuations appearing broadly fair, investors should focus on portfolio allocation, risk appetite, investment horizon and rebalancing rather than booking profits solely based on past
