Starting 2026 on the Right Foot - How Indian Fund Managers Are Positioned for the Year Ahead

Mar 31, 2026
 

After a volatile and consolidative 2025, Indian markets enter 2026 at a critical juncture. While domestic fundamentals remain resilient - supported by infrastructure spending, consumption recovery, and corporate capex - global trade tensions, enhanced geopolitical risks, and FPI flow trend continue to shape investor sentiments.

Morningstar's 'Starting 2026 on the Right Foot-India' draws on our on-the-ground research and interactions with portfolio managers to decode how leading fund managers are positioning for the year ahead.

Equity portfolios show a preference for large caps for stability, with selective mid- and small-cap exposure for alpha. Sectorally, managers favor domestically driven themes such as financials, consumer cyclicals, healthcare, and industrials, while staying cautious on globally sensitive or valuation-heavy sectors.

In fixed income, the focus has shifted toward short duration, accrual strategies, and high credit quality, as managers prioritize carry and flexibility over aggressive duration bets.

Morningstar's latest report breaks down these evolving allocation trends and highlights how our top-rated funds are navigating risks and opportunities as 2026 unfolds.

What's Inside:

  • How equity managers are balancing stability and alpha across market caps
  • Sector overweight and underweight positioning versus benchmarks
  • How top-rated funds are aligned across different sectors
  • Duration strategies and credit positioning in fixed-income portfolios

Read the full report here

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