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The Mirae Asset Capital Markets AMFI analyst report highlights the growing popularity of index funds, with 10 new schemes launched in November 2024 alone, increasing the total to 270. These funds attracted inflows of Rs.43 billion, underscoring their low-cost structure and alignment with market benchmarks. Broad-based index funds offer diversified exposure to the overall market, while sector-specific index funds focus on themes such as renewable energy or technology, providing targeted returns based on specific trends.

1) Hybrid Funds

Hybrid funds offer a balanced approach, combining equity and debt for diversified returns. Inflows into hybrid schemes reached Rs.41Billion in November 2024, driven by dynamic asset allocation funds that adjust equity and debt exposure based on market conditions. Multi asset allocation funds, with Rs 24bn in inflows, provide exposure to equities, debt, and alternative assets such as gold, offering a comprehensive investment strategy.

2) Systematic Investment Plans

Systematic Investment Plans (SIPs) remain a favored route for retail investors, with contributions surging 48% YoY to  Rs. 253 billion in November 2024. The 5-year CAGR of 25% underscores their effectiveness in disciplined wealth creation. Diversified equity funds through SIPs can mitigate market volatility and deliver long-term growth. Allocating smaller amounts to high-growth themes like EVs and green energy allows for targeted exposure without over-concentration.

3) Gold ETFs

Gold ETFs saw Rs 13 billion in inflows in November 2024, with AUM growing 64% YoY to Rs.442 billion. Given global uncertainties and inflationary pressures, gold remains a vital hedge. Core allocation strategies include maintaining 5-10% of your portfolio in gold ETFs to hedge against market volatility, and leveraging funds focused on mining or technology-driven gold production for additional growth.

4) Debt-Oriented Schemes

Debt-oriented schemes provide stability and consistent income, especially in uncertain markets. In November 2024, low-duration funds attracted the highest inflows (Rs 44bn), followed by ultra-short-duration (Rs.30 billion) and money market funds (Rs 24 billion). For 2025, low-duration funds are ideal for short-term goals with minimal interest rate risk. Corporate bond funds offer higher yields while maintaining credit quality, and dynamic bond funds are suitable for investors looking to capitalize on changing interest rate scenarios.

5) Emerging Themes for 2025

Mirae Asset Capital Markets has identified emerging themes likely to dominate investor interest in 2025. Funds focused on sustainability and ESG principles are expected to gain traction, while advancements in AI, cloud computing, and fintech present lucrative opportunities in the technology and innovation sector. Additionally, global diversification through international index funds or thematic funds provides exposure to global growth stories and currency diversification.

6) Aligning Investments with Financial Goals

Reflecting on November 2024 trends and preparing for 2025, Mirae Asset Capital Markets emphasizes the importance of aligning investments with financial goals, risk appetite, and market trends. A diversified approach combining equities, debt, and alternative investments can help investors achieve optimal returns while mitigating risks. By staying informed and proactive, investors can harness the opportunities that lie ahead in the dynamic world of financial markets.

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