Harish Krishnan, Co-CIO and Head of Equity at Aditya Birla Sun Life AMC , believes large-cap stocks currently offer better risk-reward than mid and small caps due to sector trends and fund flows. The fund house manages $3.34 billion in assets as of November 30, 2025.

Market Leadership Shift

Krishnan observes that market leadership is shifting as investors move from business-to-business sectors to consumption-led themes. He expects several sectors that lagged in the last three to four years could lead the next cycle, including banks, IT services, metals, cement, textiles, chemicals, fast-moving consumer goods (FMCG), oil and gas, and energy. Most of these sectors have higher weight in large-cap stocks.

Small Cap Overcrowding Concerns

The fund manager highlights significant overcrowding in small caps, describing it as "a bus which is significantly overcrowded." The data reveals a notable imbalance in the market:

"As a result, the risk-reward is still with the larger companies at this point of time," Krishnan explains.

Key Sector Opportunities

Krishnan identifies three sectors that stand out over the next 12 to 18 months:

Consumption: Government tax measures and monetary support are helping demand, while companies shift focus from margins to volumes. Many FMCG companies have lowered margin guidance and are using cash flows for small acquisitions to support growth.

IT Services: Despite concerns around artificial intelligence, expectations remain low. IT firms are likely to benefit as companies use their services to adopt AI, with currency levels also supporting the sector.

Materials: This includes chemicals and building materials, where recent capital expenditure has not yet translated into revenues.

Investment Strategy and Outlook

Krishnan maintains a positive outlook on metals after strong performance in 2025. He notes that FMCG stocks remain under-owned due to valuation concerns, but many companies are generating steady cash flows and focusing on volume growth. His team prefers niche personal care and food companies, where the impact of quick-commerce competition is lower.

The fund manager sees opportunity in consumer durables, where revenue pools are large but margins remain low. He points out that valuations in business-to-consumer durable companies have fallen sharply over the last five years, while business-to-business companies have seen valuation expansion.

Equities vs Gold Perspective

Krishnan expects equities to outperform gold over the medium term, even amid global uncertainty. He references past periods such as the global financial crisis and the COVID-19 pandemic, when equities in gold terms bottomed out during peak fear. "From a medium-term perspective, it makes sense to allocate more to equities," he states.

Selective Small Cap Approach

While acknowledging that market weakness is largely due to investor caution and profit-taking in mid and small caps, Krishnan believes selective opportunities still exist. His team is buying consumer-focused small-cap stocks in materials and consumer durables that generate steady cash flows and have completed major capital spending. He emphasizes that "the nature of winners will be very different" and investors need a fresh approach rather than relying on stocks that led the previous cycle.

Aditya Birla Sun Life AMC has resumed accepting fresh subscriptions in its three international equity schemes after maintaining a suspension on inflows for over three months. The fund house issued a notice-cum-addendum on January 9, 2026, officially reversing the suspension that had been implemented since October 7, 2025.

Schemes Reopened for Investment

The three international equity schemes where subscriptions have been recommenced include:

• Aditya Birla Sun Life International Equity Fund
• Aditya Birla Sun Life Global Emerging Opportunities Fund
• Aditya Birla Sun Life Global Excellence Equity Fund of Fund

Investment Parameters and Conditions

The fund house has established specific parameters for the resumed investment acceptance:

The daily limit encompasses fresh investments, additional purchases, and systematic transactions such as Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs), wherever available across all three schemes.

Terms and Future Modifications

Aditya Birla Sun Life AMC has retained flexibility in its investment framework by reserving the right to modify the maximum subscription amount in these schemes at any point in the future. The fund house clarified that apart from the resumption of inflows, all other features, terms, and conditions outlined in the Scheme Information Document (SID) and Key Information Memorandum (KIM) will remain unchanged.

Background of the Suspension

The mutual fund had originally suspended fresh subscriptions to these overseas-focused schemes effective October 7, 2025, citing operational considerations. During the suspension period, the AMC had also halted new SIP and STP registrations while allowing existing systematic investments registered prior to the effective date to continue operating normally.

The notice-cum-addendum issued for the reopening will form an integral part of the existing scheme documents, ensuring proper documentation and regulatory compliance for the resumed investment acceptance.