Union Mutual Fund urges investors to look beyond market noise and bet on India’s long-term growth

Despite short-term market turbulence, India’s structural resilience and disciplined investment approach present compelling long-term opportunities, says Madhu Nair, CEO of Union AMC. “We are likely navigating a phase of peak uncertainty. Large-cap stocks are expected to remain appealing from a risk-reward standpoint,” he adds.

Despite prevailing market volatility, Union AMC remains constructive on India’s long-term growth trajectory, underpinned by strong structural fundamentals. The AMC states, that India continues to demonstrate solid macro-economic resilience, a high and sustainable potential growth rate, and robust corporate and banking sector balance sheets. The outlook is further empowered by anticipated demand acceleration driven by tax concessions, expanded welfare payouts, and a potential uptick in private capital expenditure in response to a recovering demand environment. Additionally, resilient domestic flows continue to offer a stable investment backdrop.

While the positives are significant, risks remain that could influence market direction in the near term. These include volatile global geopolitics and uncertainty surrounding the US elections, particularly under a potential Trump administration. Domestically, competitive welfarism and the dynamics of coalition politics may pose fiscal challenges. There are also concerns about a possible deceleration in infrastructure investments if government priorities shift post-election. Furthermore, a sudden surge in equity supply and the evolving stance of foreign investors—shaped by US-China tensions—could impact capital flows and valuations, as per the Union AMC report.

Considering the present market condition, Nair said “Returns are likely to be stronger over the next five years, with India currently positioned at a particularly favourable juncture. It is human nature to overestimate short-term outcomes while underappreciating long-term potential. We remain confident in the enduring promise of the Indian economy and equity markets over the next 10 to 15 years. This could be a rare opportunity to build intergenerational wealth — but only for those who stay disciplined and committed to their financial journey. Amidst the prevailing market noise, we encourage investors to stay focused on their long-term goals.”

These comments come at a time when market participants are adopting a cautious stance, amid heightened global uncertainties driven by Trump-era trade tariff concerns and substantial outflows from foreign institutional investors.

Harshad Patwardhan, Chief Investment Officer, Union Asset Management Company Private Limited (Union AMC) said, “While short-term challenges such as global geopolitical tensions and trade-related uncertainties persist, India’s long-term macroeconomic fundamentals remain strong. Healthy corporate and banking sector balance sheets, prospects of a demand revival fuelled by tax relief and expanded welfare schemes, and the potential onset of a new private capex cycle are key positives driving our outlook.”

Against this backdrop of improved market valuations and the introduction of a more investor-friendly tax regime, the Union Mutual Fund encouraged individuals to initiate or step up their Systematic Investment Plans (SIPs).

Under the new tax regime from FY 2025 -26 onwards, as per Union Budget 2025, effective  April 1, 2025, individuals earning up to ₹12 lakh annually are now exempt from paying income tax. This significant increase in disposable income presents an opportunity for households to channel savings into long-term investments through SIPs, per the report.

Union Mutual Fund believes this environment could offer an opportunity for investors to align their financial plans with potential long-term wealth creation. The fund house estimates that, fuelled by rising disposable incomes and greater awareness around disciplined investing, monthly SIP inflows across the mutual fund industry may scale up to ₹40,000 crore over the next 18–24 months.