CEO Speak September 2025

September 2025 unfolded against a backdrop of geopolitical cross-currents and policy shifts that left many businesses navigating uncharted waters. In our interconnected global economy, where change is both constant and unpredictable, adaptability has become a strategic necessity. Managing uncertainty and navigating through them effectively is crucial for investors as well.

Market Overview:

Indian equity indices saw a modest recovery in September 2025 with BSE Sensex and NSE Nifty up 0.6 per cent /0.8 per cent, respectively. Broader market also saw an improvement with NSE Midcap Index up 1.4 per cent and BSE Smallcap Index gaining 1.6 per cent for the month. The industry’s AUM has continued to grow- as of August 2025, India’s mutual fund AUM crossed ₹75.19 lakh crore, reflecting broad-based growth. Metals was the best performing sector for the month. Autos, Oil & Gas, Power, Capital Goods and Banks also outperformed the Nifty.

On the domestic economy front, the GST rate cut announced by the government along with the previously announced income tax rate cuts should significantly help boost private sector consumption and help boost private capex in the current times of global uncertainty. Forecast of an above normal monsoon is also a positive for rural demand.

The debt market in September 2025 was marked by stability and opportunity. With inflation cooling further and the RBI maintaining a dovish stance, the repo rate held steady at 5.5 per cent. While equity markets wrestled with turbulence, fixed income and debt markets offered compelling potential — especially for investors seeking more stability and income.

Why fixed income funds should be explored by investors?

For investors uneasy about equity volatility but unwilling to settle for ultra-low returns in cash, fixed income funds offer an intermediate corridor — better yields than cash or traditional bank deposits.

• With inflation moderating, real yields are more attractive for fixed income instruments.
• Dynamic bond funds, which can shift across maturities and credit quality, offer flexibility to benefit in both rising- and falling-rate scenarios. As yields fluctuate, these funds can adjust duration exposure tactically.
• As spreads between corporate bonds and government securities widen in certain segments, active debt funds can selectively pick credit instruments with attractive risk-adjusted returns.
• Investors can use this environment to rebalance from overexposed equity holdings and redeploying into debt, preserving overall portfolio discipline.

Here are some pointers for investors who want to meaningfully include fixed income in their portfolios:

• Time horizon matters: For short-to-medium goals (1–5 years), lean toward short-duration, low-duration, or dynamic bond funds rather than long-duration debt, which carries higher interest rate sensitivity.
• Diversify within debt: Mix government securities, corporate bonds, AAA-rated papers, and instruments with varying maturities to spread credit and interest rate risk.
• SIP discipline matters in Debt instruments also: Just as in equity investing, systematic investments (SIPs) in debt funds can help average entry costs and reduce emotional timing errors.

We recommend to investors to take help from their financial advisors. Every investor’s needs, time horizon, and risk appetite are unique. Professional advice ensures your investment strategy—across equity, debt, and hybrid funds—remains tailored to your personal financial plan.

September 2025 reaffirmed two things for India’s mutual fund investors: equity markets remain lively but volatile, and debt/fixed income funds are gaining renewed relevance as a stabilizer and yield enabler.

As we move into the festive season, take stock of your portfolio and investments. Do basic hygiene checks like nomination and communication address updation. In such a dynamic landscape, the investor who stays calm, systematic, and goal-focused is likelier to benefit over time.

On behalf of the entire HSBC Mutual Fund team, wishing you a Very Happy Diwali. May this festive season bring joy, prosperity, and renewed confidence in your financial journey—helping you stay the course toward your future aspirations.

Happy investing. Stay invested.

Views provided above are based on information in public domain and subject to change. Investors are requested to consult their financial advisor for any investment decisions.

Source: AMFI, Bloomberg. Data as on September 2025 end or as latest available

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