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Time of India
12-06-2025
- Business
- Time of India
Midcap mutual funds deliver 19% return in 3 months. Check top performers
In May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% month-on-month from an inflow of Rs 3,313 crore in April. Midcap mutual funds delivered an average return of 18.77% over the past three months, outperforming all equity fund categories. However, investor inflows declined for the second straight month in May, reflecting caution over high valuations and market volatility. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Despite delivering the highest average return of approximately 18.77% over the past three months—topping all equity mutual fund categories—midcap mutual funds saw a decline in investor interest. Monthly inflows into the category fell by 15% in May, following a 4% drop in April, an analysis by ETMutualFunds expert noted that the analysis points to rising investor caution, driven by concerns over high valuations and market volatility. Despite strong gains in the mid-cap index over the past quarter, many investors seem to be booking profits or adopting a wait-and-watch approach, wary that the segment may be overheating.'This decline in inflows despite performance suggests that investors may perceive current mid-cap valuations as stretched. Heightened geopolitical uncertainties and stretched market valuations are prompting a shift in preference towards safer large-cap or hybrid categories. It may also indicate a sophistication among retail investors,' Adhil Shetty, CEO, shared with were around 22 categories in the said period, of which midcap funds ruled the return chart. Out of 29 funds in the midcap category, Invesco India Midcap Fund offered the highest return of 23.99% in the last three the same period, HSBC Midcap Fund delivered a return of 23.06%, followed by Edelweiss Mid Cap Fund with 21.06%, and Mirae Asset Midcap Fund with 20.75%.Kotak Emerging Equity Fund, the second-largest midcap fund based on assets managed, delivered a return of 19.88% in the last three months. HDFC Mid-Cap Opportunities Fund , the largest midcap fund based on assets managed, delivered a return of 17.34% in the mentioned period. SBI Magnum Midcap Fund offered the lowest return of 13.54% in the last three on the performance of midcap funds, the expert noted that given the sharp rally in midcap stocks and increasing market volatility, lump-sum investments in this segment involve higher timing risks. For long-term investors, a staggered approach through midcap SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) continues to be the most prudent strategy.'SIPs help average out costs over time and reduce the risk of entering at market peaks—an important consideration given that mid-caps tend to be more sensitive to market corrections. While a short-term correction may happen, trying to time the market precisely is notoriously difficult. Therefore, disciplined investing via SIPs/STPs over the next 12–18 months can help build exposure without chasing short-term highs,' Shetty further shared with May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% on a monthly basis from an inflow of Rs 3,313 crore in April. The inflows in April were down by 4% from the inflow of Rs 3,438 crore in investors adopting a cautious approach and the category witnessing a decline in inflows for two consecutive months, Shetty shares that the outlook for mid-cap funds over the medium to long term remains constructive, especially for investors with a 5-year-plus believes that with India's economic recovery gaining momentum, earnings growth in the midcap segment is likely to remain strong, driven by structural themes such as the manufacturing push, rising domestic consumption, and a revival in capital expenditure.'However, short-term headwinds such as global interest rate uncertainty, oil prices, and election-linked volatility may trigger intermittent corrections. Valuations are above historical averages, which warrants caution. Hence, future returns may moderate from recent highs,' he should always invest based on their risk appetite, investment horizon, and goals.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Economic Times
12-06-2025
- Business
- Economic Times
Midcap mutual funds deliver 19% return in 3 months. Check top performers
In May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% month-on-month from an inflow of Rs 3,313 crore in April. Despite delivering the highest average return of approximately 18.77% over the past three months—topping all equity mutual fund categories—midcap mutual funds saw a decline in investor interest. Monthly inflows into the category fell by 15% in May, following a 4% drop in April, an analysis by ETMutualFunds expert noted that the analysis points to rising investor caution, driven by concerns over high valuations and market volatility. Despite strong gains in the mid-cap index over the past quarter, many investors seem to be booking profits or adopting a wait-and-watch approach, wary that the segment may be overheating.'This decline in inflows despite performance suggests that investors may perceive current mid-cap valuations as stretched. Heightened geopolitical uncertainties and stretched market valuations are prompting a shift in preference towards safer large-cap or hybrid categories. It may also indicate a sophistication among retail investors,' Adhil Shetty, CEO, shared with ETMutualFunds. Also Read | Mutual fund SIP stoppage ratio slows down to nearly 72% in May There were around 22 categories in the said period, of which midcap funds ruled the return chart. Out of 29 funds in the midcap category, Invesco India Midcap Fund offered the highest return of 23.99% in the last three months. In the same period, HSBC Midcap Fund delivered a return of 23.06%, followed by Edelweiss Mid Cap Fund with 21.06%, and Mirae Asset Midcap Fund with 20.75%.Kotak Emerging Equity Fund, the second-largest midcap fund based on assets managed, delivered a return of 19.88% in the last three months. HDFC Mid-Cap Opportunities Fund, the largest midcap fund based on assets managed, delivered a return of 17.34% in the mentioned period. SBI Magnum Midcap Fund offered the lowest return of 13.54% in the last three on the performance of midcap funds, the expert noted that given the sharp rally in midcap stocks and increasing market volatility, lump-sum investments in this segment involve higher timing risks. For long-term investors, a staggered approach through midcap SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) continues to be the most prudent strategy.'SIPs help average out costs over time and reduce the risk of entering at market peaks—an important consideration given that mid-caps tend to be more sensitive to market corrections. While a short-term correction may happen, trying to time the market precisely is notoriously difficult. Therefore, disciplined investing via SIPs/STPs over the next 12–18 months can help build exposure without chasing short-term highs,' Shetty further shared with May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% on a monthly basis from an inflow of Rs 3,313 crore in April. The inflows in April were down by 4% from the inflow of Rs 3,438 crore in March. Also Read | Gold ETFs see inflows of Rs 292 crore in May after two straight months of outflows With investors adopting a cautious approach and the category witnessing a decline in inflows for two consecutive months, Shetty shares that the outlook for mid-cap funds over the medium to long term remains constructive, especially for investors with a 5-year-plus believes that with India's economic recovery gaining momentum, earnings growth in the midcap segment is likely to remain strong, driven by structural themes such as the manufacturing push, rising domestic consumption, and a revival in capital expenditure.'However, short-term headwinds such as global interest rate uncertainty, oil prices, and election-linked volatility may trigger intermittent corrections. Valuations are above historical averages, which warrants caution. Hence, future returns may moderate from recent highs,' he shared. If you are looking for recommendations, see Best mid cap mutual funds to invest in June 2025One should always invest based on their risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Hindustan Times
10-06-2025
- Business
- Hindustan Times
RBI cuts repo rate by 100 bps in 2025, but home loan borrowers may have to wait for full benefit
The Reserve Bank of India (RBI) has cut the repo rate three times this calendar year, with two 25 basis point (bps) reductions in the first two Monetary Policy Committee (MPC) meetings. There were followed by a sharper 50 bps cut in the most recent policy. This brings the total rate cut to 100 bps, signalling the central bank's strong intent to stimulate credit demand and revive economic activity by lowering borrowing costs. This development should come as positive news for home loan borrowers, as it is expected to reduce EMIs, especially for those with floating-rate loans. However, despite the RBI's clear direction, banks and lending institutions often delay or partially pass on the benefits of rate cuts. As a result, many borrowers, particularly those with floating-rate loans, may experience a lag in relief, as the rate transmission is not always immediate or complete. So, it will be a while before the lower rates are passed on to the new borrowers. In fact, the 50 bps cut has not been passed on to new borrowers, and mostly PSU banks have passed on a rate cut of up to 40 bps in some cases. Below is a list of banks that are offering home loan interest rates of 8% or less. 'The lowered CRR limits are expected to boost transmission and new borrowers should also be able to avail low rates soon,' says Adhil Shetty, CEO BankBazaar, a fintech portal. So, it will be a while before reduced home loan rates are passed on to new borrowers, which could be a few days to a week or more. There are reasons behind why it takes time for banks to pass on the rates. Historically, many loans in India have been linked to the Marginal Cost of Funds-Based Lending Rate (MCLR). This system incorporates a bank's internal cost of funds, operational costs, and risk premiums. 'As a result, even when the RBI reduces the repo rate, banks may not immediately revise MCLR since it's based on their own cost structures rather than the RBI's benchmark rate,' says Raoul Kapoor, co-CEO, Andromeda Sales and Distribution. So, if your loan is still linked to the Base Rate or Marginal Cost of Funds-based Lending Rate (MCLR), this rate cut may not benefit you immediately as these benchmarks are slower to respond to policy changes compared to the repo-linked loans that reflect the revision within three months. 'So if you are on an older benchmark, this is the time to consider a switch. A refinance at 100bsp lower will help you save close to ₹4 lakh on a ₹25 lakh outstanding. If you retain your higher EMI, your savings will be even higher,' says Shetty. Also Read: Buying your first home? Netizens say it's like an arranged marriage—Heavy on emotions and financial pressure On the other hand, repo rate-linked loans, introduced more widely in 2019, are directly pegged to the RBI's repo rate. In these loans, any change in the repo rate should be passed on more transparently and quickly, depending on the reset clause. However, not all borrowers have shifted to this model, and many older loans still remain on MCLR or base rate systems. 'Despite these challenges, with a total repo rate cut of 100 basis points this year, there is growing expectation that banks will begin passing on the full benefit to borrowers—especially for home loans. This is also crucial to align with the RBI's objective of stimulating demand and supporting economic growth through monetary easing,' says Kapoor. Once all the benefits are passed on, this is how home loan borrowers will benefit. Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics
Time of India
06-06-2025
- Business
- Time of India
how much will 1% RBI repo rate cut reduce your EMI or tenure? Check calculations
Home loan borrowers have a big reason to cheer! The Reserve Bank of India (RBI) has cut the repo rate by a huge 50 basis points in the Monetary Policy Committee (MPC) meeting. With this, the cumulative repo rate cut since February this year stands at 100 basis points or 1%! Repo rate is the rate at which the RBI lends to the banks. Tired of too many ads? go ad free now If this rate comes down, banks are able to in turn lend to borrowers at lower interest rates. To put it simply, today's jumbo 50 bps rate cut would in the coming months mean lower EMIs for home loan borrowers. While the impact of the 1% repo rate cut will take time to reflect in home loan borrowers' EMIs, the transmission is expected to be faster this time round. What does 1% repo rate cut mean for your loan EMIs? Adhil Shetty, CEO, notes, 'Today's 50 basis points rate cut is likely to push home loan rates closer to the psychologically important sub-8% level. The lowest rates in the market are already at 7.85%, largely available to prime borrowers with credit scores above 750, and often in refinance or balance transfer cases. A further rate cut could see sub-8% rates becoming more widespread—something we haven't seen since early 2022. ' Cumulative Impact Of 3 Rate Cuts; Original rate of interest @8.5%; Revised rate of interest 7.5% 1 lakh 25 lakh 50 lakh 100 lakh Original EMI ₹ 867.82 ₹ 21,695.58 ₹ 43,391.16 ₹ 86,782.32 Original Interest ₹ 108,277.58 ₹ 2,706,939.40 ₹ 5,413,878.80 ₹ 10,827,757.60 Original Tenor 240 months 240 months 240 months 240 months Interest With Fixed EMI ₹ 77,399.55 ₹ 1,934,988.83 ₹ 3,869,977.65 ₹ 7,739,955.31 Interest Saved ₹ 30,878.02 ₹ 771,950.57 ₹ 1,543,901.15 ₹ 3,087,802.29 Months Reduced 36 months 36 months 36 months 36 months Interest With Variable EMI ₹ 93,342.37 ₹ 2,333,559.16 ₹ 4,667,118.32 ₹ 9,334,236.65 Interest Saved ₹ 14,935.21 ₹ 373,380.24 ₹ 746,760.48 ₹ 1,493,520.96 EMI Reduced ₹ 62.23 ₹ 1,555.75 ₹ 3,111.50 ₹ 6,223.00 Numbers approximate. Actual numbers may depend on lender's unique policies. Source: For a Rs 50 lakh home loan with a 20 years tenure, you will save Rs 3,111.50 in monthly EMIs in case of interest rate with variable EMIs. In case of fixed EMIs, the loan tenure will come down by 36 months or 3 years. Also Read | Rate cut transmission crucial Santosh Agarwal, CEO, Paisabazaar says, 'The 50-basis-point rep rate cut should lead to reduction in home loan interest rates, both for new and existing home loan borrowers. However, the quantum and time of the rate cut transmission would depend on factors like type of interest rate benchmarks used by the lenders, their rate reset related policies regarding, rate reset dates set for the borrowers, etc.' Tired of too many ads? go ad free now 'The transmission would be quickest and absolute in case of existing home loans linked to the repo rate. The exact date of rate cut transmission to the existing borrowers would depend on the rate reset dates set by their respective lenders. Till then, they will continue to repay their loans as per their existing interest rates. As the cost of funds of the lenders play a major role in determining their internal benchmark rates, there would be a longer lag in the transmission of repo rate cuts to home loans linked to MCLR- or other internal benchmarks,' he adds. The transmission of rate cuts remains uneven, says Adhil Shetty. 'Borrowers with repo-linked home loans will see the fastest and fullest pass-through. But loans taken pre-2019, especially with public sector banks, continue to be linked to older benchmarks like the MCLR or even the Base Rate. These borrowers will not benefit automatically from today's cut,' he said. 'If you're paying 50 basis points or more above the lowest available rates, and especially if you're in the early years of your tenure, it's worth exploring a refinance to a repo-linked loan. This can help bring down your interest cost significantly over the life of the loan,' he advocates. Atul Monga, CEO & Co-Founder, BASIC Home Loan says, 'Public sector banks, which usually act faster in passing on such cuts, are expected to roll out attractive loan offerings. This will create significant savings for borrowers. That said, I would advise borrowers to review and compare loan options carefully to make the most of the favorable rate environment.' Also Read |
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Business Standard
06-06-2025
- Business
- Business Standard
Bad news for FDs: Rates to fall sharply as RBI cuts repo rate by 50 bps
The Reserve Bank of India (RBI) cut its repo rate by 50 basis points to 5.5 per cent on Friday, June 6, in its third monetary policy review for the 2025–26 financial year. This is the third straight cut by the Monetary Policy Committee (MPC) this year. The move is expected to ease borrowing costs, but fixed deposit (FD) investors may not be pleased. Banks have already begun lowering interest rates on deposits, continuing a trend that started after the central bank's earlier rate reductions. "For depositors, a 50 bps repo rate cut may not slash FD rates overnight, but it does signal the beginning of a downward trend. Banks are likely to start trimming deposit rates, especially for short- and medium-term tenures," said Adhil Shetty, CEO of Several of the country's largest lenders have trimmed their fixed deposit interest rates since the RBI began easing policy in early 2025. < In February and April 2025, the RBI cut the repo rate by 25 basis points each. < According to a report by SBI Research, FD rates have been reduced by 30 to 70 basis points since February 2025. < Interest rates on savings accounts have also been brought down to a floor rate of 2.70 per cent, the report said. Some banks had introduced limited-period schemes to attract deposits, but those are now being withdrawn or adjusted. 'Now they are discontinuing them or lowering the rates on them,' said Santosh Agarwal, CEO of Paisabazaar. What investors can do now With fixed income returns shrinking, investors are looking at alternative strategies to protect returns. "If you've been waiting to lock in current rates, some of which still hover around 7.5%, now may be the time. Senior citizens, who enjoy an extra 25 to 50 basis points, should consider locking in longer tenures," suggested Shetty. He also recommended diversifying. 'Senior citizens should use FDs for stable income, but must also allocate a portion of their portfolio into equities for inflation-adjusted returns,' he said. Look beyond traditional options Aman Gupta, director of RPS Group, said investors should be more hands-on in reviewing options. 'Start with banks and NBFCs that offer the best rates—small finance banks tend to pay 0.5–1 per cent higher than the more orthodox banks,' he said. He also advised reviewing tax impact. 'Post FD returns after the tax slab are not inflation-indexed; tax saving FDs or Senior Citizen Savings Scheme (SCSS) outperform inflation post taxation and therefore are better alternatives,' said Gupta. For investors seeking a mix of safety and returns, Gupta pointed to hybrid investment options. 'Channel a portion of the savings towards instruments such as arbitrage or conservative hybrid funds which offer better stability than equities but tend to be volatile relative to bonds,' he said. 'Maintain an emergency fund with six to twelve months of expenses while exploring alternatives,' he added. "Fixed deposit rates to come down sharply as banks transmit this rate cut. Investors should look at 2 to 3-year corporate bonds for their portfolio as they continue to offer good spreads over government and FD rates, and interest rates will come down more gradually for corporate bonds,' Vishal Goenka, co-founder of said. Try staggered investments Siddharth Maurya, founder and managing director of Vibhavangal Anukulakara Private Limited, advised spreading fixed deposit investments across various tenures. 'Try out debt mutual funds, corporate bonds, or RBI floating rate savings bonds as they may yield superior returns after tax,' he said. 'Employ FD laddering—divide your portfolio into several FDs with staggered maturities, for example, 1, 2 and 3 years.' He also urged depositors to keep an eye on maturity timelines. 'If you have shorter-term deposits, make sure to renew them reliably to bypass auto-renewal at devalued rates,' said Maurya. Key investor tips Lock in current FD rates: Consider fixing rates now for medium to long-term tenures. Use laddering: Spread FDs across different maturities to manage reinvestment risk. Explore small savings schemes: SCSS and POMIS may offer higher, safer returns. Consider AAA-rated corporate FDs and debt mutual funds: These may provide better yields but come with some risk.
