In conversation with Madhu Nair, CEO, Union AMC Private Limited

The RBI’s recent decision to hold rates while hinting at future cuts suggests a cautious optimism. How do you see this balancing act impacting equity and debt market performance in the near term?
We believe RBI’s recent actions should be seen in the context of other actions taken by both RBI and the government. Since the beginning of the year, RBI has cut policy rates substantially, infused liquidity, and eased lending norms. On the fiscal side, the government had reduced effective income Tax on a particular slab in the budget earlier in the year and, more recently, has substantially reduced GST on a wide range of products. We believe all these actions represent a concerted attempt by the policymakers to induce consumption growth in the economy. We see improvement in consumption growth likely materialising in the second half of this fiscal. This could likely be positive for earnings growth as well as market prospects.

From a fixed income perspective, the recent MPC maintained status quo on rates and stance, in line with market expectations. The upward revision of real GDP growth to 6.8 per cent (from 6.5 per cent) and the downward revision of inflation for FY26 to 2.6 per cent (from 3.1 per cent) augur well for the bond market. While some volatility may persist amid global uncertainties and tariff-related developments, real yields remain attractive. Given the favourable growth-inflation dynamics, the rate environment is expected to stay benign, with scope for further monetary support if needed. (Source: Reserve Bank of India - Monetary Policy)

Taken together, these developments indicate a concerted attempt by policymakers to sustain growth while keeping inflation in check. We believe with consumption expected to pick up in the second half of the fiscal and real yields remaining attractive, both equity and bond markets could stand to benefit from the current policy environment.

How should long-term investors view the current headwinds from U.S. trade and immigration policies, as temporary disruptions, or structural challenges for India’s export-focused sectors, especially IT and pharma?
We believe the current situation on trade policy is a work in progress. We expect a US-India bilateral trade deal to be consummated in the medium term where the terms will likely be less adverse than they are now. In our view, Indian IT companies today are much less vulnerable to changes in immigration policy than a decade ago. Also, we do not expect punitive tariffs on generic pharmaceutical products and, as a result, most Indian pharma companies should be fine.

With SIP inflows in the Indian Mutual Fund industry touching an all-time high of Rs 28,464 crore in July and sustaining robust levels despite a modest dip in August, what do you see as the key structural factors driving this surge, and do you believe the momentum is sustainable?
Several structural factors are driving the sustained surge in SIP inflows. First, there is a growing awareness about mutual funds as a product and SIPs as a disciplined investment route. This has helped investors view SIPs not just as an investment tool but almost as a fourth essential alongside Roti, Kapda, and Makaan.

Second, rising per capita income has enabled more individuals to save and invest, further strengthening the SIP culture. The positive experience of investors, seeing steady wealth creation through SIPs, has reinforced confidence and encouraged them to continue investing regularly.

Digitisation has also played a pivotal role by simplifying access, improving transparency, and making investing a seamless process for millions of investors. We believe this momentum is sustainable because these underlying factors are structural and long-term in nature. Digitisation is here to stay, per capita income levels are set to rise, and financial awareness will only deepen. Based on these trends, we expect the industry’s SIP book to touch around Rs 40,000 crore over the next 18–24 months.

What would be your message to first-time investors navigating today’s dynamic and often unpredictable market environment?
As India moves steadily toward its vision of Viksit Bharat 2047, investors will encounter both exciting opportunities and significant noise along the way. This noise, in the form of short-term market volatility or distractions, can often derail long-term wealth creation.
Our message to first-time investors is simple: start early, stay consistent, and remain focused on your goals. Long-term investing success is built on discipline, patience, and clarity of purpose rather than reacting to short-term fluctuations.

How is Union AMC positioning itself to stand out in an increasingly competitive mutual fund industry, especially with the entry of large new players?
At Union Mutual Fund, our core purpose is to serve as an enabler — a bridge that translates India’s Viksit Bharat opportunity into tangible wealth creation for our investors. Simply put, our mission is to ensure that the value created in the capital markets is effectively translated into investor portfolios.

This can only be achieved when investors actively participate in the journey (invest karna zaroori hai) and remain invested through market cycles (market mein rehna zaroori hai).
However, we recognise that frequent market news and short-term noise can distract investors from staying the course. Our role, therefore, is to guide and enable investors to remain focused on their long-term goals.

Aligned with our vision, we are building our business on three strong pillars:

• Investment Excellence: We are committed to deliver growth by nurturing a skilled and complementary investment team, adhering to a robust and time-tested investment philosophy, and following a disciplined process.
• Distribution Reach: We aspire to reach every household in the country through a wide and diverse distribution network including Union Bank of India branches, mutual fund distributors, wealth partners, digital platforms, and regional distributors. Our communication approach is also designed to encourage investors to stay invested for the long term.
• Operational Efficiency: We continuously refine our systems and processes to ensure every investor interaction is smooth, efficient, and aligned with our investor-first approach.

These pillars, anchored in our unwavering commitment to investor interests, define how Union Mutual Fund stands apart; offering clarity, transparency, and value in an increasingly competitive landscape.