India remains better placed despite global turmoil, says BoI MF CEO

India is well positioned compared to many economies across the globe due to its structural growth drivers. However, markets will continue to experience intermittent volatility due to the ongoing West Asia conflict, said Mohit Bhatia, CEO, Bank of India Mutual Fund in an email interview to Ananya Chaudhuri. Here’s edited excerpt: 

How do you see Indian markets performing in FY27 amid the geopolitical tension?

 

Indian markets may continue to observe intermittent volatility due to US Iran conflict, highly volatile crude prices, currency impacting many countries’ balance sheets, and uncertainty around interest rate trajectories

 

However, India remains relatively better positioned compared to many global economies as structural growth drivers remain firm, making the outlook constructive for long-term investors. The financial year 2027 (FY27) is likely to be more earnings-driven rather than valuation-driven.  

Which sectors can support a rally in the near term? And which sectors can underperform? 

Our portfolio stance is positive on  pharma and healthcare. We’re also overweight on materials, metals, and capital goods given the benefits from realignment of global supply chains. Moreover,  resilient domestic consumption  should benefit the consumer discretionary segment.

 

We’re underweight on IT, realty and Oil and Gas. 

Suggest a simple portfolio for long-term retail investors, in terms of a broad asset mix?

 

For a typical long-term retail investor, a simple approach to build a portfolio may be to put regular monthly investments of around 50–65 per cent of savings in equity mutual funds, 25–35 per cent in safer options like fixed deposits or debt funds, and 10–15 per cent in gold. While investing in this kind of a broad mix, equities help your money grow over the long term, while fixed-income investments provide stability. Gold acts as a cushion during market uncertainty. 

 

However, the exact mix should depend on risk appetite, age, financial goals and individual circumstances. 

There has been an increase in flows into passive and index products. How do active fund managers defend alpha generation in this environment? What has been the Bank of India Mutual Fund's strategy?

 

  Passive investing has grown reasonably well due to lower costs, simplicity and increasing awareness. However, India's passive penetration in the retail segment remains significantly lower than developed markets, leaving meaningful opportunities for active management. 

 

Active fund managers tend to generate higher alpha based on the sector rotation opportunities, asset allocation decisions, stringent risk management capabilities and identifying emerging businesses before they enter benchmark indices. A majority of the outcome within the under researched universe of mid and small cap businesses suggest stronger alpha creation opportunities with high risk-reward. 

 

At Bank of India Mutual Fund, We follow a balanced approach by leveraging thorough research to make informed, strategic selections while focusing on achieving results. Our process is structured, repeatable, and risk-integrated to deliver consistency across market environments. 

 

  How should investors think about allocation between large-, mid-, and small-cap funds today?

 

Investors should avoid chasing recent outperformers and instead align allocations with risk appetite and investment horizon. Large-cap funds offer greater stability and are suitable for equity focused investors with relatively conservative- moderate risk appetite, while mid- and small-cap funds have higher growth potential but are more volatile. A balanced approach may be to keep 40-60 per cent equity investments in large-cap funds and allocate a smaller portion to mid- and small-caps for higher growth opportunities. 

 

Investors with a long-term horizon of 5–10 years can consider higher exposure to mid- and small-cap funds, but diversification remains important.

 

For investors starting SIPs in 2026, what is your advice amid elevated uncertainty and slower global growth?

 

Market volatility is often perceived as a risk, but for long-term SIP investors it can become an opportunity to accumulate more units during market corrections. The biggest risk is often not volatility itself but discontinuing investments during temporary market declines. For investors starting SIPs in 2026, the key is to stay focused on long-term goals rather than short-term market fluctuations.

 

  How has the business been for the Bank of India Mutual Fund? Which funds are fetching more investments?

 

 

As of April 30, 2026, the fund house handles over ₹15,300 crore in assets under management with approx. 8.59 lakh investor folios and 22 open ended and two close ended products. Within the Bank of India Mutual Fund portfolio offerings, Bank of India Flexi Cap Fund and Bank of India Small Cap Fund have been among our portfolio strategies/funds that have seen good interest, reflecting investor demand for both diversification and growth opportunities. 

 

We have also seen good interest from our distribution partners and investors towards our unique offering in the Aggressive Hybrid Category namely Bank of India Mid & Small Cap Equity & Debt Fund with volatility control through investments in fixed income. 

================================

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.