Despite near-term volatility, India’s structural strengths and disciplined investing offer significant long-term potential, according to Union Mutual Fund, which recently upgraded the domestic equity markets to the “Attractive Zone” in its fair value spectrum indicator. This marks a notable shift from the fair and moderately expensive zones where markets remained for most of the calendar year 2024.
While sharing his money-making mantra, Madhu Nair, CEO, Union AMC, said, “Investor should invest for a minimum of five years in the markets. History suggests that the benchmark BSE Sensex delivered positive returns in 35 of 45 years, with 10-year rolling returns averaging 14.8% and a 99.2% probability of positive outcomes.” His views came at the time when market participants are cautious about the ongoing uncertainty in the global markets due to Trump’s Trade tariffs and heavy outflows by foreign institutional investors.
Global investors have offloaded shares worth Rs 2.48 lakh crore since October 2024. Meanwhile, the 30-share index cracked nearly 13% from its 52-week high scaled on September 27, 2024.
However, the fund house estimates that, fuelled by rising disposable income and greater awareness around disciplined investing, monthly SIP inflows across the mutual fund industry may scale up to Rs 40,000 crore over the next 18–24 months. Of late, the monthly mutual fund SIP inflows went down marginally by around 0.28% at Rs 25,926 crore in March against Rs 25,999 crore in February.
Under the new tax regime from FY 2025-26 onwards, as per Union Budget 2025, effective April 1, 2025, individuals earning up to Rs 12 lakh annually are now exempt from paying income tax. This significant increase in disposable income presents an opportunity for households to channel savings into long-term investments through SIPs.
Considering the present market condition, Madhu Nair, Chief Executive Officer at Union AMC said “It is human nature to overestimate short-term impact and underestimate long-term potential. We believe in the long-term promise of the Indian economy and equity markets over the next 10 to 15 years. This could be an opportunity to create intergenerational wealth — but only for those who remain disciplined and committed to their financial journey. In a noisy market environment, we urge investors to stay focused on their goals.”
Sector wise, the fund house is overweight on consumer discretionary, telecom, capital goods and healthcare. On the other hand, it is underweight on energy and consumer staples.
Harshad Patwardhan, Chief Investment Officer, Union AMC said, “While short-term challenges such as global geopolitical tensions and trade-related uncertainties persist, India’s long-term macroeconomic fundamentals remain strong. Healthy corporate and banking sector balance sheets, prospects of a demand revival fuelled by tax relief and expanded welfare schemes, and the potential onset of a new private capex cycle are key positives driving our outlook.”
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
