[on-hold music]

2024 saw equities outperform gold rally, DXY rise, but bearish return on developed market fixed income assets. EM bonds still delivered positive returns. In 2025, it seems that the market are placing little emphasis on any significant risks to economic growth and hence preference for risk assets prevail. The key monitorable will be the direction US economic policy takes. Trump policies will also influence the policy direction of the US Fed and central banks worldwide. China will need to take more actions to support growth, primarily on consumer spending side. In India, we expect both monetary and fiscal policy to increase their focus on growth incrementally. Monetary policy could go slow on macro-prudential tightness and support liquidity. Though we do not rule out the shallow rate-cutting cycle. Fiscal policy, on the other hand, could go slow on fiscal consolidation and reduce the fiscal deficit by a m-mere twenty to thirty basis point versus eighty to ninety basis point each year in FY24 and FY25. In the Union Budget 2025, we hope for some revival to revenue expenditure and positive changes in the income taxes. Policy support could help India's growth to recover to seven percent in FY26 from an expected six point three percent in FY25. 2025 could start with a relative outperformance in investment growth over consumption growth. Given the hope for policy support, consumption outlook could turn brighter through the course of 2025. Export outlook currently is unexciting. Rupee has depreciated two and a half percent in 2024. Dollar strength on Trump's promises is leading to lack of FII enthusiasm for EM nations. These problems get compounded by the fact that in India, external account has shifted from comfort to caution. The biggest reason is the sharp slowdown in the net FDI due to dual factors of reduced fresh inflow and sharp jump in repatriation. Thus, so long as investors continue to buy into Trump's promises and favor the US dollar, rupee could depreciate further. We are sanguine on outlook for India's retail inflation. Two years of vegetable price rise would provide a strong favorable base. We expect CPI to average under four and a half percent in FY26.

Mutual fund investments are subject to market risks. Read all scheme related documents carefully