Markets flat? No problem. HNIs stay invested | Stock Market News

A range-bound market may test investors' patience, but wealth managers say it is far from a dead end for investment opportunities. Money managers say high-net-worth individuals (HNIs) are growing more mature: instead of reacting to every swing or rushing to cash, they’re staying invested and getting selective about new deployments.

HNIs are typically defined (outside IPOs) as individuals with ₹5-50 crore in investable assets, excluding their primary residence. Those with over ₹25-50 crore are generally classified as ultra HNIs (UHNIs).

Feroze Azeez, joint chief executive of Anand Rathi Wealth Ltd, said HNIs are using market corrections to gradually accumulate quality businesses and increase long-term allocations.

“HNI mutual fund accounts increased 12.8% between December 2025 and March 2026, taking HNIs' share of total mutual fund accounts from 8.2% in September 2025 to 8.9% by March 2026.”

Individual investors, comprising retail investors and HNIs, have consistently maintained around 91% ownership of equity-oriented mutual fund assets, holding 90.7% in January 2026, 90.6% in March 2026 and 90.6% in May 2026, he added.

With the ceasefire now behind it, market attention has shifted to the June-quarter earnings season, as investors assess how much the West Asia war has dented India Inc.’s profits. After more than a year of consolidation in equities, many believe that if the earnings impact turns out to be less severe than feared, it could give the market the much-needed direction it has been looking for.

Meanwhile, HNIs are broadening their investment playbook rather than waiting for the next broad-market rally. Alongside established avenues such as Category II Alternative Investment Funds (AIFs) and global investing, newer offerings, including specialized investment funds (SIFs) and mutual fund-based portfolio management services (PMSes), are also drawing attention from HNIs.

Two styles win in flat markets, according to Manish Bhandari, CEO and portfolio manager, Vallum Capital.

Equal-weight portfolios shed the drag of re-rated mega-caps; the Nifty Equal Weight fell 9% against the Nifty 500's 16%. Low-volatility compounds by losing less; over 18 years on NSE, it recovered 8.5 times faster than the benchmark. When the market signals revival, the style of Momentum and Alpha has done well, Bhandari explained.

“For HNIs, equity-oriented PMS, with concentrated holdings, low churn, and a 3-5 year mandate, is the sharpest instrument.”

Nirav Karkera, head of research and fund manager at W by Groww, said, “SIFs are aimed at investors looking for risk-optimised investment solutions, while mutual fund-based PMS offerings appeal to those who want their core portfolio anchored in mutual funds”. He noted that, much like SIFs, the MF-based PMS space is still at an early stage and is expected to gain traction as investor awareness grows.

W by Groww, the wealth management arm of Groww, offers a mutual fund-based PMS targeted at investors with a moderately aggressive risk profile. The strategy has generated returns of around 12-13% over the past year, Karkera pointed out.

He added that apart from SIFs and mutual fund-based PMSes, HNIs are also increasingly exploring Category II alternative investment funds (AIFs), which provide access to opportunities beyond listed equities, particularly in unlisted companies and debt.

Several private market equity offerings under the AIF category-II target an aggressive return profile through relatively longer-term commitment and participating in various stages in the lifecycle of a company before it hits public markets.

Within the same category, several private credit strategies are typically seen as targeting returns in the 12-14% range, depending on the fund's nature and mandate, he explained.

Also, global investing remains firmly in favour as HNIs seek genuine portfolio diversification.

Global investing has gained significant momentum over the past year, particularly as the rupee depreciated, said Rohit Sarin, co-founder of Client Associates, a multi-family office firm managing over ₹60,000 crore in assets.

According to him, the currency's weakness prompted many HNIs to appreciate the importance of genuine diversification beyond Indian equities, rather than keeping their portfolios concentrated in a single market.

The Indian rupee has depreciated around 10% against the US dollar in the past year.

Sarin said investors are also increasingly exploring alternative investment avenues, with Category II AIFs, SIFs and mutual fund-based PMSes emerging as key areas of interest as they seek more diversified portfolio strategies.

However, he cautioned that SIFs remain a new product with limited performance history, and investors will need time to build confidence in the asset class.

Azeez said SIF assets have risen sharply from ₹2,010 crore in October 2025 to ₹13,182 crore in May 2026, reflecting strong early interest. However, with most funds having track records of less than a year, it is too early to assess how they perform across different market cycles.

Dipti has spent nearly a decade happily knee-deep in the fast-moving, occasionally nerve-wracking, and always fascinating world of stock markets, tracking everything from sharp sell-offs to surprise rallies, and the narratives that drive them. She began her journalism journey at Informist, sharpened her market instincts at CNBC Digital and Moneycontrol, and is now charting new territory with Mint. Here, she is exploring new ground, bringing together sharp analysis, on-ground insights, and a keen eye for what really moves markets.<br><br>Before stepping into journalism, Dipti studied law and worked with a solicitor firm for close to three years, an experience that gave her a strong foundation in analytical thinking, contracts, and corporate structures. But the pull of markets and storytelling proved stronger, prompting a switch from law to journalism.<br><br>She writes about stocks and investments, but that’s only part of the story. Dipti also teams up with market experts to turn complex trends into sharp, easy-to-understand videos, occasionally peeks at deals and acquisitions, and regularly picks the brains of industry leaders. Somewhere between earnings calls, market swings, and boardroom chatter, she’s always looking for the next story that explains what’s really moving the markets.

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