From AI to SIPs: Edelweiss Mutual Fund's Radhika Gupta on what investors should watch now

In a year marked by geopolitical tensions, volatile equity markets and growing anxiety around artificial intelligence, Radhika Gupta, CEO, Edelweiss Mutual Fund, believes investors should resist emotional investing and focus on balance.

“We live in a very social media-driven world that rewards extreme views,” Gupta said during an interaction after Edelweiss Asset Management Company crossed the ₹1 lakh crore Equity and Hybrid AUM milestone. “But investing is much more about balance and discipline.”

Her comments come amid heightened market uncertainty, with investors weighing concerns around earnings growth, global interest rates, crude oil prices and the long-term impact of AI on businesses and capital flows.

‘Much of the bad news may already be behind India’

According to Gupta, markets entered 2026 expecting a stronger earnings recovery cycle for India, but geopolitical tensions in West Asia changed that outlook.

“The West Asia crisis happened and India paid the price because crude is our Achilles heel,” she said.

Higher crude prices and global uncertainty affected earnings growth through the fourth and first quarters, she noted. However, Gupta believes the second half of 2026 could be relatively stronger if earnings begin recovering after the September quarter.

“With crude now below $70 and a lot of the bad news potentially behind us, India could be in a better place later this year than where it started,” she said.

Areas of caution: IT and basic consumption

While Gupta said overall market valuations now appear “more fair” than overheated, she highlighted two areas where Edelweiss AMC remains cautious.

The first is the information technology sector, where uncertainty around artificial intelligence is forcing investors to reassess business models and future growth visibility.

“We are not writing off the industry, but we want to see how companies readapt,” she said.

The second area is “vanilla consumption,” or basic consumption sectors, where inflation and demand pressures continue to remain a concern.

Financials, power and premium consumption among key bets

Despite caution in select sectors, Gupta said financials remain Edelweiss AMC’s biggest investment allocation.

The fund house is positive on both banks and capital market-linked businesses, while also seeing opportunities in energy security, power-related themes and premium consumption.

The comments reflect a broader market trend where investors are increasingly favouring domestic growth themes and sectors linked to infrastructure and rising discretionary spending.

‘Good investing needs a healthy dose of scepticism’

Asked whether investors are underestimating risks in the current environment, Gupta said uncertainty is an unavoidable part of investing.

“Good investing is about having a healthy dose of scepticism and not being on either extreme,” she said.

Among the key macro risks she identified were the monsoon, persistently high global interest rates and the possibility of global investors continuing to favour AI-linked trades over emerging markets like India.

Gupta said India is being seen globally as an “anti-AI trade,” which could temporarily affect foreign institutional investor flows.

SIPs continue to be a structural trend

Gupta also addressed concerns around rising SIP discontinuations, saying they should be viewed in the context of the industry’s overall growth.

“I think SIP is a structural trend,” she said, adding that some increase in cancellations is natural during periods of flat or weaker returns.

India’s mutual fund industry currently sees monthly SIP inflows of roughly ₹30,000 crore, driven largely by retail investors.

She said the long-term structural shift toward financialisation of household savings remains intact.

AI will improve efficiency, not replace fund managers

On the growing role of artificial intelligence in the asset management industry, Gupta said AI is being used internally to improve productivity and research efficiency.

However, she does not believe technology can replace human-led investment decisions anytime soon.

“Investment calls still need judgment, wisdom, experience and understanding of cycles,” she said.

According to Gupta, AI may make research and reporting more efficient, but investing still requires human interpretation and experience.

‘Stay the middle path’

Gupta has a message for retail investors navigating volatile markets and information overload.

“Don’t get too happy or too depressed,” she said. “Investing is much more middle path than extremes.”

She also reiterated her optimism about the long-term outlook for India’s mutual fund industry, saying she expects the sector to continue growing at strong double-digit rates as more households move toward financial assets and market-linked investments.

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