Mutual fund investing in 2026: Types of schemes that may do well
Mutual fund investors are planning their equity strategy for 2026. Experts recommend flexi-cap and large & mid-cap funds for stability and growth. New investors should start with flexi-cap and large-cap categories. Experienced investors can consider index, flexi cap, multi cap, and international funds. Caution is advised for mid-cap, small-cap, and international funds due to current valuations.
As existing and new investors plan their equity strategy for 2026, the big challenge is not the lack of options but choosing the right mix. While no one can predict markets with certainty, experts believe certain categories may help to navigate volatility and deliver good returns. Here’s how investors can approach equity mutual funds in 2026.
Sagar Shinde, VP Research at Fisdom shared with ETMutualFunds that for 2026, the core focus should remain on flexi-cap and large & mid-cap funds, as they offer the best balance between stability and growth while allowing fund managers to tilt toward domestic opportunities amid global uncertainty.
Shinde further added that large-cap funds continue to be relevant for earnings visibility and balance-sheet strength and new investors should primarily start with flexi-cap and large-cap categories, keeping portfolios simple, diversified, and resilient across market cycles.
**Also Read | Portfolio check: How to rejig your mutual fund investments in 2026
**
Another expert, Vishal Dhawan, CEO of Plan Ahead Wealth Advisors, a wealth management firm in Mumbai told ETMutualFunds that experienced investors may wish to focus on a combination of index funds, flexi cap funds, multi cap funds and international funds , considering current valuations.
Dhawan added for international funds, they should consider investing in a gradual manner and new investors may wish to start with a combination of large cap oriented index funds and flexicap funds, considering the valuations on large caps are currently more attractive vis a vis mid cap and small cap funds.
Several mutual fund categories are considered riskier such as mid caps, small cap, international funds, sectoral and thematic funds. Market experts recommend such categories to investors who have high risk appetite and can take exposure in such riskier categories. Experts also cautions investors from entering the categories that have high valuations.
So by considering all factors such as risk appetite, valuations etc Dhawan recommends that equity investors need to be careful with mid cap and small cap funds, considering mid and small cap valuations continue to be at a significant premium to long term averages and they should also be careful about adding lump sums into international funds at this point, as valuations globally are also at a premium. “A blended style of investing may be best suited to investors going forward, considering that the switch between value and growth may not be easy for investors to get the timing right with,” he added.