Looking ahead, global conditions are likely to be mixed as the room for monetary policy to soften further and for fiscal conditions to expand are limited, so returns may be more balanced across regions and sectors rather than driven by a narrow group of large technology stocks.
FinTech BizNews Service
Mumbai, 1 January 2026: The Wealth Company Mutual Fund has come out with very insightful research report titled “From Reflection to Readiness And the Road Ahead for ’26.” The report offers a data-backed view on the key trends expected to shape the mutual fund and investment landscape in 2026, drawing from market performance in 2025, macroeconomic shifts, investor flows, valuation cycles and sectoral patterns. It also highlights how Indian markets are evolving amid shorter cycles, higher volatility and a stronger domestic investor base:
The global landscape is undergoing a profound transformation. Tectonic shifts in power equations are moving the world toward a multipolar order defined by protectionism and a strategic drive for self-sufficiency. Traditional economic correlations are weakening, market cycles are shortening, and elevated volatility has become the new normal in a continued search for risk-adjusted returns. Additionally, Governments now play a central role in directing investment and reconfiguring supply chains to enhance national resilience, replacing the relative predictability of the past with structural uncertainty.
Amidst this realignment, India remains the world’s fastest-growing major economy, supported by a large domestic market and a strong demographic dividend. Its relatively low export dependence offers some insulation, yet it remains exposed to global volatility and therefore, must be agile.
Looking back at 2025, it was a year of providing support to the economy, the consumer and the markets. From the tax relief announced in the Union budget, a favorable monsoon helping rural demand and food output, a dovish central bank that slashed policy rates and kept liquidity abundant to GST cuts, the theme was clear to one and all – economic growth had to be protected. We believe these measures will continue to have a positive impact on demand dynamics and GDP prints for CY 26 as well.
That said, from an investor’s standpoint, we expect moderate returns as steady inflows from domestic players could be countered by more volatile foreign money.
This is the essence of what this report aims to uncover, through a mix of history and macroeconomic dynamics. The bigger message is to show India can leverage its unique position to navigate a world of shorter cycles, higher volatility, and shifting global power structures.
In 2025, global financial markets moved through a challenging but resilient phase. Growth slowed in many regions due to trade tensions, geopolitical uncertainty and still-elevated interest rates, but most major economies avoided deep slowdowns. Equity markets, helped by easing inflation and expectations of rate cuts, generally delivered positive returns, with technology and AI-related themes continuing to attract strong investor interest. That said, forecasts from multilateral agencies suggest that growth in ‘26 will only see a moderate uptick as trade frictions and policy uncertainty persist in many regions.
Against this backdrop, India’s stock markets held their ground. We saw heightened uncertainty around the end of March as President Trump announced reciprocal tariffs, and India was no exception. And still, as it almost always happens, the market formed a bottom when the news flow was very negative. Surprisingly, even though India subsequently went on to become the most tariffed Asian nation, the optimist investor had enough evidence that quality stocks with earnings visibility were available at a reasonable price. To quote Sir John Templeton, “The time of maximum pessimism is the best time to buy”. At the April lows, helplessness was abundant and the news flow was anything but bullish. In other words, “maximum pessimism” was the predominant undertone, and stocks have showed incredible resilience as the Nifty climbed to a new record.
Looking ahead, global conditions are likely to be mixed as the room for monetary policy to soften further and for fiscal conditions to expand are limited, so returns may be more balanced across regions and sectors rather than driven by a narrow group of large technology stocks. For India, the outlook remains constructive, but policymakers will have to be cognizant of global headwinds and domestic execution risks.
Overall, 2025 reinforced two key lessons: resilience matters, and diversification across geographies, asset classes and sectors is essential.
As investors enter 2026, they need to remember that cycles are getting increasingly shorter and sharper. This means one needs to be adequately diversified across a range of asset classes with low correlations, to ensure that overall portfolio performance can ride out the volatility.
In summary – diversification across less correlated assets, realistic return expectations and an unhinged focus on quality will define 2026 and the performance of your investments.
