Published on: September 9, 2026
In an interaction with Ahmedabad Mirror, Sandeep Bagla, CEO of Trust Mutual Funds discusses how Indian retail investors are increasingly embracing mutual funds as a long-term avenue to participate in India’s growth story. He highlights the continued strength of SIP investments and explains why investors should view market corrections as opportunities rather than reasons to exit. The conversation also explores the growing interest in small- and mid-cap funds, the importance of diversification across market capitalisations, and the rising participation of investors from Tier 2 and Tier 3 cities. Bagla emphasises the importance of goal-based financial planning, understanding one’s risk appetite and staying disciplined despite short-term market volatility and negative news flows.
1.Equity mutual fund inflows have moderated recently, while SIP contributions continue to remain strong. What does this tell you about the mindset of Indian investors today?
The retail participation is increasing rapidly, as seen by rise in individual folios and increase in monthly SIP numbers. The Indian retail has understood by experience that it is best to participate in the long term India growth story through mutual funds. The clear messaging MF Sahi Hai by AMFI, consistent regulatory reforms by SEBI, and credible performance of mutual fund schemes have all bolstered the growing investor confidence in mutual fund schemes.
2.Many investors tend to stop their SIPs during market corrections. Why is this one of the biggest mistakes investors make?
Market corrections are actually great for retail investors who want to invest for the longer term. Falling markets mean moderate NAVs and it translates into more number of units for investors for the same amount invested. Retail investors tend to get influenced by the negative global news flow, which is unlikely to impact long term growth prospects of companies. Investors should focus on their goals and actually try to invest more in periods of market underperformance.
3.Small- and mid-cap funds have attracted significant investor interest. Are investors taking more risk than they realise?
It has been traditionally felt that large cap companies are less volatile than mid and small companies. Over the last few years, one should realise that companies have gorwn multifold in terms of revenues, profits and market cpaitalisation. However, the number of large and mid caps have been constrained by definition as only 100 and 150 largest companies respectively. It is only a perception that large companies are safer. Other companies have gained significantly and one would better off to invest in the companies by looking at growth prospects and valuations.
4. How should a retail investor decide how much of their portfolio should be allocated to large-cap, mid-cap and small-cap funds? Generally, a retail investor should take the help of an advisor/distributor/planner to undertake comprehensive financial planning. As per the financial goals, taxes, time horizon, risk appetite, a portfolio of mutual funds should be constructed. I would feel that the equity portion should be divided equally between large, mid and small caps. If the funds ae invested in a scheme like Flexi cap funds, the fund manager can decide the allocation between market caps from time to time depending upon relative valuations and proespects.
5. There is growing participation from investors in smaller cities. What changes are you seeing in the investment behaviour of investors from Tier 2 and Tier 3 cities
Information about financial markets is now more widely available to investors through electronic media. There is greater ease of investing in mutual funds through investment portals and platforms. MF distributors have done a great job of marketing benefits of MF schemes across length and breadth of the country. We are seeing an increasing proportion of incremental inflows from smaller towns now.
6. What is one piece of advice you would give to an investor who is worried about market volatility but has a long-term investment horizon?
My advise is to focus on one’s individual goals, rather than market volatility and news flows. India growth story is very much intact and will continue for a very long time to come. To beat inflation, and earn a real return such that one can meet the financial goals. it has been demonstrated over last few decades that investment through mutual funds is the best option. One should make a comprehensive financial plan with the help of an expert, and stick to the plan.
