Core Insights - The performance of domestic equity funds has significantly lagged behind international funds, with only 10 out of 494 domestic active equity funds achieving positive returns in SIP mode since April 2025, while 60 out of 62 international funds reported gains, including a remarkable 164% return from Nippon India Taiwan Equity Fund [1][12] Domestic vs International Performance - Domestic portfolios have faced substantial losses, contrasting sharply with the high returns from international funds, where DSP World Mining Overseas Equity fund returned 82% and other funds like Mirae Asset Global Electric & Autonomous Vehicles Equity fund and HSBC Brazil Fund delivered nearly 60% [2][12] - Emerging market funds also performed well, with returns in the 47-53% range, significantly outperforming domestic equity funds [2][12] Factors Influencing Performance - The performance gap in FY26 is attributed to several factors, including explosive growth in hyperscalers, AI-driven tech dominance, rising metals and energy prices, continuous rupee depreciation against the dollar, and a slowdown in the earnings cycle in India [5][12] Long-term Perspective - Wealth advisors caution against making investment decisions based solely on short-term performance, noting that over a five-year period, domestic small and mid-cap SIPs delivered 26-30% CAGR, outperforming Nasdaq 100 and Nifty 50 [6][7][12] Investment Recommendations - Experts recommend a 15-20% allocation to international funds for retail investors with a minimum five-year investment horizon to achieve meaningful diversification [8][12] - For first-time global investors, starting with a Nasdaq 100 feeder fund or global multi-asset fund is advised, while avoiding chasing last year's winners or investing heavily in single-country EM funds initially [9][12] Currency Considerations - The discipline of SIP is particularly important in global funds due to currency timing, as it helps smooth out entry points despite currency depreciation [10][12] Future Outlook - There is uncertainty regarding whether international funds will continue to outperform domestic ones in FY27, with a focus on global exposure for optimal returns rather than higher returns [10][12] - The recent surge in global indices is viewed as largely cyclical, and while global exposure is deemed essential, it is acknowledged that markets will eventually adjust to sectoral patterns [10][12]

Core Insights - Retail investors reduced their holdings in 62 midcap stocks during the September quarter of FY26, indicating a 'sell-on-rise' strategy amid market uncertainties [8] - The BSE Midcap index experienced a significant increase of 8% during the period ending September 30, 2025, and extended gains to nearly 13% as of October 21 [8] - Notable gainers included Delhivery with an 87% return, L&T Finance with a 75% surge, and One97 Communications (Paytm) with a 67% increase, despite declines in retail ownership [8] Retail Holdings and Performance - Delhivery topped the gainers' list with an impressive 87% return, while retail ownership decreased by 55 basis points [2][8] - L&T Finance saw a 75% increase in stock value, with retail shareholding falling by 37 basis points [2][8] - Other significant gainers included Indian Bank and Laurus Labs, both rising by approximately 50%, with retail ownership declines of 55 and 11 basis points, respectively [8] Underperformers - Sixteen stocks faced declines due to sustained underperformance, including KPIT Technologies, which dropped 12% and saw retail holdings decrease by 28 basis points [5][8] - Ipca Laboratories recorded a 14.64% drop in stock value, with a 27 basis point reduction in retail stake [5][8] - Other underperformers included Balkrishna Industries (down 9.30%), Blue Star (down 8.08%), and Emami (down 6.15%), with corresponding retail stake cuts [5][6][8] Investment Strategy - WhiteOak Capital MF recommends investing in midcaps through systematic investment plans (SIP) for long-term growth, highlighting a 10-year rolling SIP return average of 17.43% for the Mid Cap Index [7][8] - The note contrasts this with an XIRR of 15.62% for investors who switched based on the previous year's best-performing index [7][8]