How should first-time investors approach mutual funds in FY27?

If you’re starting your investment journey in FY27, the market may feel a bit confusing right now. On one side, India’s long-term growth story is still strong. On the other, there’s constant noise, global tensions, crude oil swings, and foreign investors pulling money out.

Markets have also been a bit shaky. Indices fell over 5 percent  towards the end of FY26 before recovering slightly, and volatility spiked during that period.

But industry experts say this isn’t something beginners should fear.

“Volatility can feel uncomfortable when you’re new, but it’s also when better entry opportunities come up,” says Ashish Anand, Partner at Fortuna Asset Managers.

Why this may actually work in your favour

After the recent correction, experts say markets are not as expensive as they were earlier. That improves the entry point for new investors.

“When markets correct, new investors get a chance to start at more reasonable levels. It improves the overall risk-reward,” explains Anand.

He expects some ups and downs to continue in FY27, but says that shouldn’t stop beginners from getting started.

Trying to wait for the perfect time rarely works, what matters more is starting early and investing regularly.

What should your investment strategy be?

The simplest way to start is also the smartest. You don’t need to chase trending sectors or ‘high return’ ideas right away.

Industry experts say, a better way to think about it is this: put most of your money in steady, well-diversified funds, that’s your core. Then, if you want, keep a small portion aside for slightly riskier bets, that’s your satellite.

Think of your core as the part that keeps your portfolio stable when markets get shaky. Without that, it’s easy to panic and exit at the wrong time.

“In FY27, beginners should prioritise asset allocation and SIP discipline over market timing,” says Vijay Maheshwari, Founder, Stocktick Capital.

Step 1: Build your core (70-80 percent )

This is your foundation, where most of your money should go, especially in the first year.

• Index funds (30-40 percent) – A simple, low-cost way to invest in the broader market without overthinking.
• Flexi-cap funds (20-30 percent) – These invest across large, mid and small companies, adjusting based on market conditions.
• Balanced Advantage Funds (10-20 percent) – These automatically adjust equity exposure, helping reduce risk when markets are volatile.Maheshwari says, “You can also consider adding a small allocation to multi-asset, which invests across equity, debt and even gold, helping diversify risk within a single fund.”

In the first year, the focus should be on building a portfolio you can stick with. Stability comes before returns.

Step 2: Add satellite exposure (20-30 percent)

Experts say once your base is ready, you can add a small portion to higher-risk, higher-return segments like:

• Mid- and small-cap funds
• Thematic or sector funds

“Satellite investments should be limited. These are additions to your portfolio, not the foundation,” says Anand. The idea is to build a structured portfolio, not keep chasing new ‘hot’ sectors every few months.

Step 3: Keep it simple

You don’t need too many funds. Even 2-4 well-chosen funds are enough to get started. Avoid constantly switching based on short-term performance.

Anand explains, “A simple portfolio, followed with discipline, usually works better than a complicated one that keeps changing.”

Also, decide your overall asset mix early on. For example, Maheshwari explains, “Decide how much goes into equity vs safer assets like debt or gold, and stick to it. Review it once or twice a year, not every time markets move.”

What you should ignore in FY27

One of the biggest risks for new investors isn’t the market, experts say it’s reacting to headlines.

News around global conflicts, oil prices, or market falls can make investing feel risky. But history shows that after fear-driven declines, markets tend to recover over the next 12-18 months.

At the same time, Anand points out, “India’s broader fundamentals remain stable, government spending, improving consumption, easing interest rates, and a strong banking system.”

“Most mistakes happen when investors react to news instead of sticking to their plan,” explains Maheshwari.

“That also means continuing your SIPs even during market dips. Regular investing helps average out costs and reduces the risk of getting your timing wrong,” he adds.

The bottom line

For beginners, the approach is simple: Start early, invest regularly through SIPs, stick to diversified funds, and give your money time to grow.

“Investors who stay consistent through volatility are usually the ones who benefit the most when the cycle turns,” Anand says. Because in the long run, it’s not timing the market, but time in the market that builds wealth.