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First Post
23 minutes ago
- Business
- First Post
Are mutual funds still the middle class's best bet for wealth building?
In the pre-2015 era, mutual funds faced little competition outside traditional insurance, FDs, and gold read more For much of India's working population, building wealth has always been a long game. The middle class, in particular, has relied on stable income, regular savings, and financial discipline to inch closer to goals like home ownership, retirement, and children's education. Among the many instruments available, mutual funds—especially through systematic investment plans (SIPs)—emerged as the preferred vehicle. But the financial landscape in 2025 looks very different from what it was a decade ago. From stock trading apps to real estate investment platforms, today's investor has no shortage of options. Which begs the question: are mutual funds still the best bet for India's middle class? Or has their advantage begun to erode? STORY CONTINUES BELOW THIS AD Mutual Funds: The Historic Favourite For most salaried households, mutual funds offered a simple proposition: let professionals manage your money, diversify across sectors, and invest consistently over time. The introduction of SIPs made this process even more accessible. Investors could commit a small fixed amount each month and benefit from rupee cost averaging. As the popularity of SIPs grew, so did the use of sip calculators—tools that allow investors to simulate the future value of their monthly contributions. These calculators helped first-time investors understand the power of compounding and plan more effectively for long-term goals. More from Business How Indian fintech startups are driving Malaysia's UPI-like digital payments revolution In the pre-2015 era, mutual funds faced little competition outside traditional insurance, FDs, and gold. But they were the first to truly offer market-linked growth in a structured and scalable format, making them the natural choice for upwardly mobile families. The Case for Mutual Funds in 2025 If popularity is any indicator of continued relevance, mutual funds remain firmly in the lead. According to data from the Association of Mutual Funds in India (AMFI), total industry AUM rose from around ₹25.49 lakh crore in June 2020 to ₹74.41 lakh crore by June 2025—a nearly threefold increase in just five years. SIP adoption continues to be the backbone of this growth. As of June 2025, monthly SIP inflows stood at ₹27,269 crore, while the total number of active SIP accounts crossed 8.6 crore. That's a substantial corpus being built one monthly payment at a time—often mapped out in advance using a sip calculator. The mutual fund space has also diversified beyond traditional equity and debt schemes. Passive investing—via index funds and exchange-traded funds (ETFs)—has gained meaningful traction among investors seeking low-cost market exposure. Meanwhile, hybrid funds that combine equity and fixed income have appealed to those looking for a more balanced, risk-managed approach. These formats give middle-class investors more flexibility in aligning their portfolios with specific risk appetites and financial goals. What's Changed: The Rise of Alternatives Over the last few years, direct equity trading has seen a dramatic rise, fuelled by user-friendly apps, low-cost brokerage, and widespread market access. For digitally native investors in their 20s and 30s, building a stock portfolio directly has become an exciting, if sometimes risky, alternative. As of 2025, nearly 20% of Indian households now allocate a portion of their savings to the stock market—a significant jump compared to previous decades. The trend accelerated notably after the COVID-19 pandemic, as more individuals began seeking returns that could outpace inflation and traditional instruments like fixed deposits or endowment plans. STORY CONTINUES BELOW THIS AD While this increased participation signals a welcome rise in financial engagement, it also introduces greater exposure to volatility, especially for investors without the time or experience to manage portfolios actively. Unlike mutual funds, direct equities offer no built-in diversification or professional management—leaving much of the outcome to investor behaviour and market timing. In contrast, SIP-based investing in mutual funds, often guided by a sip calculator, encourages long-term discipline and reduces the impact of emotional decision-making. Has the Advantage Eroded? There's no denying that the investment ecosystem has become more dynamic. But rather than being left behind, mutual funds have evolved. The rise of passive and hybrid options has enabled investors to build portfolios that align with their risk preferences. Better fund transparency, improved disclosures, and benchmarking rules have made it easier to evaluate performance. And with app-based onboarding, goal-planning tools, and integrated sip calculators, even tier-2 and tier-3 city investors are coming in with clarity and conviction. The numbers confirm it. In FY25 alone, equity mutual funds saw record net inflows of ₹4.17 lakh crore, helping drive a 25% year-on-year growth in equity AUM. This happened in a year when market volatility remained high—indicating that long-term investors are staying the course rather than chasing trends. STORY CONTINUES BELOW THIS AD Who Might Want to Look Beyond Mutual Funds? There is, of course, no one-size-fits-all answer. For financially savvy individuals who actively track the markets, direct equity or thematic ETFs may offer better customisation and, potentially, higher returns. Investors with extremely high capital and a clear understanding of risk may venture into structured products, global equities, or alternative assets. But such investors are still the exception, not the rule. For the average middle-class household juggling EMIs, school fees, and emergency savings, mutual funds offer a structured, tax-efficient, and professionally managed route to wealth creation. They also allow investors to start small and scale up—often after seeing projections on a sip calculator that link monthly discipline to long-term wealth. Conclusion: A Proven Path, But Not the Only One Mutual funds have come a long way from being a niche product to becoming a mainstream tool for wealth creation—especially for India's middle class. Their continued growth, aided by rising SIP contributions, better digital access, and tailored schemes, underscores their relevance in 2025. For many, they offer a rare blend of simplicity, professional management, and disciplined wealth building—often enhanced by tools like a sip calculator. But that doesn't mean they're the only game in town. With evolving digital platforms, wider financial literacy, and the growth of alternate products—from direct stocks to ETFs and even global investment avenues—middle-class investors today have more choice than ever before. Mutual funds remain a strong contender, particularly for those seeking structure and stability. Yet depending on one's goals, risk appetite, and experience, there's room to explore beyond them too. The key is not picking sides—but picking what fits.
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Business Standard
2 hours ago
- Business
- Business Standard
360 ONE Asset launches Multi Asset Allocation Fund: Who should invest?
360 One Multi Asset Allocation Fund: 360 One Asset has launched 360 One Multi Asset Allocation Fund, an open-ended scheme investing in a diversified portfolio of equities, debt, commodities, and assets like REITs and InvITs. The new fund offer (NFO) opened for subscription today, July 30, 2025 and will close on Wednesday, August 13, 2025. According to the scheme information document (SID), the investment objective of the scheme is to provide the investors with an opportunity to invest in an actively managed portfolio of multiple asset classes. However, there is no assurance that the investment objective of the scheme will be realised, and the scheme does not assure or guarantee any returns. Raghav Iyengar, chief executive officer at 360 ONE Asset, said that by diversifying across asset classes, we aim to mitigate risk and create sustainable value for our clients in an ever-changing global environment. "With this fund, we are not only expanding our robust portfolio of investment products but also empowering investors to navigate market complexities with confidence. This is another step in our journey to redefine the investment landscape in India," he added. The performance of the fund is benchmarked against a composite index of BSE 500 TRI (25 per cent), NIFTY Composite Debt Index (45 per cent), and domestic gold and silver prices (30 per cent). The equity portion of the fund will be managed by Mayur Patel, debt by Milan Mody, and the commodities portion by Rahul Khetawat. According to SID, no exit load will be charged if up to 10 per cent of the units are redeemed or switched out within 12 months from the date of allotment. However, no exit load will be charged on redemption of more than 10 per cent of the units. In addition, no exit load will be levied if units are redeemed or switched out after 12 months from the date of allotment. During the NFO, investors can invest a minimum of ₹1,000 and in multiples of ₹1 thereafter. For SIP investments, the minimum application amount is ₹1000 and in multiples of ₹1 thereafter. 360 ONE Multi Asset Allocation Fund: Who should invest? According to the SID, the product is suitable for investors seeking to create long-term wealth and investment in multiple asset classes. However, investors should consult their financial advisors if in doubt about whether the product is suitable for them. As per the riskometer, the principal invested in the scheme will be at high risk.
News18
4 hours ago
- Business
- News18
SIP At Peaks Or Bottoms? Market Timing May Not Be As Crucial As You Think
Experts say the probability of consistently investing in SIP at market bottoms is extremely low, making market timing an unreliable strategy Systematic Investment Plan, or SIP, is emerging as a popular investment method. It offers a means for disciplined investing, as you set aside a fixed sum of money every month for future savings. A SIP offers potential for long-term wealth creation, as you gain from the power of compounding and can get a diversified portfolio with just one investment, which is managed by an expert. But what is the right day to start a SIP? Timing matters a lot when you're batting – like finding the sweet spot on the bat. In mutual fund investing, it might matter a lot less. A study by Motilal Oswal Mutual Fund shows that investors who started SIPs at market peaks and those who began at market bottoms ended up with nearly identical long-term returns. The first period examined in the study was from 2000 to 2005, a time marked by the aftermath of the global bubble burst and the Indian market's subsequent recovery – a phase of high volatility. During this period, the Nifty 500 Index's price-to-earnings (PE) ratio swung sharply, peaking at 37.26 on February 24, 2000, and bottoming out at 11.58 on September 21, 2001. This minimal return disparity is attributed to rupee cost averaging, a key feature of SIPs, which helps smoothen out the effects of market volatility. The study reinforces the idea that regular investing across market cycles reduces the risk associated with market timing. Even though starting SIPs at the bottom of the market may deliver slightly higher returns in the short term, the advantage diminishes considerably over time. Experts point out that the probability of consistently investing at market bottoms is extremely low, making market timing an unreliable strategy. 'Time in the market beats timing the market," said Pratik Oswal, Head of Passive Funds at Motilal Oswal AMC. Financial advisors echo this view, recommending consistent and disciplined investing for long-term wealth creation rather than attempting to predict market movements. About the Author Aparna Deb Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : SIP First Published: July 30, 2025, 12:22 IST News business » savings-and-investments SIP At Peaks Or Bottoms? Market Timing May Not Be As Crucial As You Think Latest News Modi Govt's Efforts Put Terrorism On Global Agenda: Jaishankar During Op Sindoor Debate India Savings And Investments SIP At Peaks Or Bottoms? Market Timing May Not Be As Crucial As You Think Telugu Cinema Vijay Deverakonda's Kingdom To Give US Fans A Head Start With July 30 Premiere Viral Japan, Russia Tsunami: What Is Safe To Eat? Explained As Floodwater May Contaminate Food Bollywood Anil Kapoor Calls Anand Ahuja 'Heart Of The Family' In Special Birthday Post latest news
Economic Times
6 hours ago
- Business
- Economic Times
MF Tracker: UTI Mid Cap Fund turns Rs 10,000 SIP to nearly Rs 1.62 crore in 2 decades
UTI Mid Cap Fund marks 20 years. A monthly SIP of Rs 10,000 has grown to Rs 1.62 crore. Long-term SIP success shows potential. UTI Mid Cap Fund which completed a milestone of 20 years in the industry has turned a monthly SIP of Rs 10,000 to Rs 1.62 crore with an XIRR of 16.73%, an analysis by ETMutualFunds showed. Launched on July 30, 2005, the scheme is given two star rating by both ValueResearch and Morningstar. A monthly investment of Rs 10,000 made 10 years ago would have been Rs 28.49 lakh now with an XIRR of 16.52%. The mid cap fund would have turned the same investment to Rs 9.31 lakh in the last five years with an XIRR of 17.69%. And lastly, the value of the same monthly investment would have been Rs 4.55 lakh in the last three years with an XIRR of 15.96%. Also Read | 1 in 2 mutual funds lost money in the last year. Is yours on the list? A lumpsum investment of Rs 1 lakh invested 20 years ago would have been Rs 18.97 lakh now with a CAGR of 15.85%. In the last 10 years, the value of the same Rs 1 lakh would have been Rs 3.63 lakh with a CAGR of 13.77%. In the last three years, the value of this would have been Rs 3.02 lakh with a CAGR of 24.74%. In the last three years, the current value of this investment would have Rs 1.63 lakh now with a CAGR of 17.75%. Based on trailing returns, since inception the fund has offered 15.85% CAGR. In comparison to benchmark and category average, the fund has underperformed in the last three, five, and 10 years. In the last 10 years, the fund offered 13.85% CAGR against 18.05% by the benchmark (Nifty Midcap 150 - TRI) and 15.55% as the category average. In the last five years, the fund posted a return of 24.78% against 30.42% by the benchmark and 27.41% as the category average. The mid cap fund in the last three years, posted a return of 18.16% against 25.24% by the benchmark and 22.51% as the category average. "UTI Mid Cap Fund emphasises on a balanced approach to portfolio construction investing in businesses with relatively long runway for growth along with turnaround or mean reversion opportunities that are potential alpha drivers. The Fund is suitable for investors looking to supplement their core equity portfolio with a high growth potential,' Vishal Chopda, Fund Manager- Equity at UTI AMC shared with to an expert, such long-term SIP success stories by a mid cap fund shows the potential of disciplined investing.'Such long-term SIP success stories in the mid-cap space highlight the potential of disciplined investing combined with a long investment horizon. Mid-cap funds generally benefit from investing in companies with scalable growth potential, and when held over a period of 15–20 years, they can generate substantial wealth despite interim market volatility,' Shruti Jain, Chief Strategy Officer at Arihant Capital Markets told a mid cap fund, the fund holds 63.58% in mid caps, 20.09% in large cap, 22.99% in small caps, and 2.64% in others. Compared to the mid cap category, the fund is underweight on mid caps, large caps, and others whereas is overweight on small caps. The mid cap category on an average holds 65.68% in mid caps, 15.02% in large caps, and 5.64% in others whereas it holds 13.66% in small comparison to the mid cap category, the fund is overweight on equities and underweight on others. The fund holds 97.56% in equity and 2.44% in others whereas the mid cap category on an average holds 94.42% in equity, 5.40% in others and 0.18% in debt. Also Read | NPS equity funds see low single-digit returns in 1 year. Is it time to review your retirement strategy? With the fund also being underweight on mid caps compared to the category, is it the right time to choose mid cap funds and what strategy to follow now?Mid-cap funds are well-suited for SIP or STP investment strategies, especially in the current environment and with markets near all-time highs, staggered investments help reduce timing risk and allow investors to average their costs over time, Jain recommends.'This is a favourable time to consider mid-cap exposure with a 5–7 year horizon,' Jain further PE and PBV ratio of the multi asset allocation fund were recorded at 58.15 times and 10 times respectively whereas the dividend yield ratio was recorded at 0.93 times as of June fund had the highest allocation in finance of around 10.87% compared to 10.25% by the category. The scheme is overweight on IT, chemicals, capital goods, consumer durables, construction materials, and analysed the other key ratios of the fund. Based on the last three years, the scheme has offered a Treynor ratio of 1.57 and an alpha of (0.37). The sortino ratio of the scheme was recorded at 0.64. The return due to net selectivity was recorded at (0.43) and return due to improper diversification was recorded at 0.06 in the last three investment style of the fund is to invest in growth oriented mid cap investor with a five to seven year investment horizon can also consider investing in mid cap funds provided they are comfortable with some short-term volatility and new investors should include mid-cap funds as part of a diversified portfolio, as they offer a good balance between risk and return over the medium to long term is what Jain recommends to the 24 funds in the mid cap category have a track record of five years in the market including UTI Mid Cap Fund. Motilal Oswal Midcap Fund offered the highest return of 34.87% in the last five years, followed by HDFC Mid Cap Fund which gave 31.64% return in the same period. Quant Mid Cap Fund gave 30.09% return in the mentioned period. SBI Midcap Fund delivered a return of 27.36% in the last five years. DSP Midcap Fund has offered the lowest return of 20.92% in the similar time frame. Also Read | NFO Alert: Bajaj Finserv Mutual Fund launches equity savings fund Considering the performance of mid cap funds in the longer horizon of five years, Jain believes that the outlook for mid-cap funds remains positive and as India's economy continues to expand and more mid-sized businesses scale up, there are several growth opportunities in this segment. 'Investors with a long-term view and a disciplined approach through SIPs or STPs can benefit from the potential upside mid-caps offer,' she Mid Cap Fund is an open ended equity scheme predominantly investing in mid cap stocks. The objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related securities of mid cap fund is benchmarked against Nifty MidCap 150 TRI and is managed by Ankit Agarwal and Vishal Chopda. The fund had an AUM of Rs 12,224.27 crore. The total expense ratio of the regular plan is 1.75% whereas that of direct is 0.87%. One should always invest based on their risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Economic Times
7 hours ago
- Business
- Economic Times
Insurance, private banks, and AI-led IT: George Thomas picks value spots in a volatile market
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In this edition of ETMarkets Smart Talk, we speak with George Thomas , Fund Manager – Equity at Quantum AMC , to decode the current market dynamics and uncover where value may still be hiding amid rising foreign institutional investors turn cautious and IPO activity gains momentum, Thomas explains why insurance companies private sector banks , and AI-led opportunities in the IT space could offer attractive entry also shares his views on earnings visibility , sector resilience, and why retail investors need to stay valuation-conscious—especially in the overheated small and midcap segments . Edited Excerpts –A) Demand environment has so far not shown a broad-based pickup. Valuations are at or above fair zone in many sectors, which leads to volatility on slight deviation from expected earnings IPO market has a strong line up which could also limit a stark rally in the market. Considering the impact of ongoing global dynamics on interest rates, trajectory of FII flows is hard to predict in the medium term. Flows have been reasonable, supported largely by the rate cuts, reasonable spread of monsoon, low base of FY25 & income tax rebates are likely to support earnings growth through the potential returns over the medium term could be lower than historic periods, they are likely to remain reasonable.A) In many cases, IPOs are launched at the most favorable part of the business cycle and launched at full there is reasonable supply awaiting to hit the markets, median stock returns of recent IPOs are muted which clearly shows a moderation in investor interest. We generally don't participate in IPOs as odds are skewed in favor of the seller.A) The result reason is progressing in line with expectation. Demand environment is not showing a stark change from the muted trend in prior quarters. Input cost moderation is helping profitability in many major sectors, asset quality trends remain reasonable in banks. Though deal wins remain reasonable and environment is stable, IT continues to witness moderate demand have seen muted domestic volume growth, partly due to inventory correction in the channel.A) India is likely to see a reasonable market performance backed by the domestic flows and earnings recovery. Muted earnings in the recent year have created a low base for recent interest rate cuts, above average monsoon and moderate inflation are likely to support the earnings trajectory through the year.A) Share of SIP in overall AUM has increased from 10.5% in FY19 to 20.4 % of Mutual Fund AUM as of FY25. Large part of investors has understood the importance of long-term volatility has clearly given an indication that markets aren't always linear. Considering the low share of equity in household financial savings, the trend can sustain for the long term.A) Private Sector Banks & Insurance offers reasonable value at the current juncture. Though banks could see margin pressure in the near term, favorable credit environment and a potential pick up in credit growth can support banks in the current of the insurance companies which are facing near term transient issues are also offering good value. IT sector has the potential to positively surprise on earnings as enterprises are likely to accelerate IT spending with the increased proliferation of new technologies like new technologies proliferate, IT service companies are likely to benefit from implementation and integration related work.A) As flows in the recent times are largely contributed by retail investors and DIIs, few segments within small & mid cap space are trading at extreme which are cognizant of valuation and focused on bottom-up analysis are likely to outperform in the current environment.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
