Report on Trends to Watch in the Mutual Fund Industry in 2026 by The Wealth Company Mutual Fund
Domestic Markets That Made Headlines
* Nifty is slated to end higher for the 10th straight year, a streak that has never been witnessed before
* The 50-member index is outperforming the Nifty Smallcap 250 by the widest margin since 2019
* Domestic mutual funds saw 57 straight months of inflows in November, a record streak
* Foreigners are on track to withdraw $18 billion from India’s equity markets, which if it were to happen, would mark the worst year of outflows in two decades – the second worst was -$17 billion, in 2022
* Domestic investors, however, bought stocks worth $83 billion, 42% higher than the CY 24 reading
* The Nifty’s largest daily gain of ‘25 so far has been the 3.8% surge seen on 12th May, on the India-Pakistan ceasefire
* The Rupee is set to end lower against the US dollar for the eighth straight year. This will be the first such losing streak in 50 years
* The RBI cut rates four times this calendar year totaling a cumulative 125 bps from 6.5% to 5.25%; the last time they cut rates so aggressively was during 2019 – 2020
* The 40-member NSE Energy index is on the verge of having its first down year in at least a decade
Global Markets That Made Headlines
* The Dollar index is down 9.1% YTD, its worst-such performance in eight years
* Spot Gold has surged 65% for the year, its best annual run since the 126% spike in 1979; Silver has jumped about 133%, its best annual performance since the 435% advance witnessed 47 years ago
* Brent crude prices are down for the third year in a row, the first time we are seeing this since 2015
* Nvidia became the first company ever to achieve a $5 trillion market capitalization
* US mega-tech firms (“Mag 7”) collectively lost half a trillion dollars in market capitalization on January 27 when Nvidia lost $590 billion in a single session – the largest ever intraday slump for any stock in history
* In May, Moody’s became the last of the three big ratings companies (after S&P and Fitch) to downgrade the credit rating of the US from the “perfect” AAA status it enjoyed
* The S&P 500 recorded its fastest ever 15% rebound from its lows this year, hitting an all-time high by mid 2025
* The Fed cut rates thrice in 2025 but that didn’t push the 10-year yield lower
* The Bank of Japan hiked its policy rate to 0.75%, the highest level in 30 years
The Year of Bullion by a Long Shot
Equities: Korea Clear Winner, India Rotation Underway
* Korea’s Kospi has been the best performing market of all major stock indexes globally.
* The ~68% surge it has seen has been fueled by a rally in semiconductor stocks, foreign flows, a reform-focused government coming to power and moderate inflation, among other things.
* Meanwhile, India has gone from “everything higher” to “large caps favoured”. Mid- and small-caps are underperforming the nifty, which shows that the liquidity-driven beta has vanished, sending the Nifty Smallcap 100 down over 7%.
* Overall, for stocks, the year has been all about AI + semis + quality growth v/s policy overhang.
NSE Sectors: PSU Banks Surge, Media Goes South
* PSU banks have been the best performing sector, with its ~28% gains for the year driven largely by a sharp improvement in NPAs and a recovery in credit growth.
* Metals have been second-best, driven by hopes of a global recovery, stimulus in China, and firmer commodity prices that benefited primarily from the dollar’s downtrend.
* Media stocks have fallen the most (-23%) due to weak advertising spends in an uncertain macro environment that hit broadcaster and digital ad revenues.
* Overall, sector performance shows that consumer spending is strong, but structurally challenged areas such as IT and real estate have found the going tough.
Commodities: Shiny Gets Shinier, Brent Bulls Missing
* Speaking commodities, and 2025 has been the year of the “uncertainty premium”.
* Gold and Silver have rallied hard thanks to a perfect storm of a softening dollar, increasing geopolitical upheavals and largely lower US yields as the Fed turned dovish on monetary policy.
* Copper (+35%) has benefited from increasing demand for AI data centers and China’s much-needed stimulus.
* Brent (-19%) has been the outlier (despite OPEC+ production cuts), on demand fears due to more EV adoption and investments in renewable energy; also, the geopolitical “war premium” has not stuck long enough to disrupt supplies.
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