Dear Investor,

At the outset, let me wish you and your family a very Happy and Prosperous New Year.

The global macroeconomic landscape is navigating a precarious balance between growth and inflation, compounded by geopolitical tensions and the impact of elections. While the global economy demonstrated resilience in recent years, 2024 growth projections have softened to around 3.0% - 3.1%. This slowdown stems from lingering pandemic effects, the ongoing war in Ukraine, and tighter financial conditions.

Inflation, though receding from its 2022 peak, remains stubbornly above target in many economies, prompting central banks to tread cautiously. Policymakers face a tough dilemma: curbing inflation without further hampering growth. Adding to this is the 2024 US election, which could reshape economic policies with far-reaching consequences for global trade, investment flows, and growth trajectories.

The Indian economy is surging, driven by robust domestic demand, infrastructure investment, and private sector resurgence. A young, expanding population and rising middle-class incomes fuel consumer demand, while initiatives like the National Infrastructure Pipeline enhance connectivity and economic activity. Policies such as ‘Make in India’ and PLI schemes are boosting manufacturing, attracting foreign investment, and creating jobs. While global headwinds and inflationary pressures remain, the Indian economy's strong domestic fundamentals and ongoing reforms provide a solid foundation for continued growth.

The Indian stock market has been experiencing notable volatility recently, influenced by a mix of global and domestic factors. Concerns about rising inflation, potential interest rate hikes by the Reserve Bank of India (RBI), and fluctuations in global markets due to geopolitical tensions and economic uncertainties have contributed to this volatility. This means that stock prices are fluctuating more than usual, creating both risks and opportunities for investors. While some investors may find this unsettling, it is important to remember that market volatility is a normal part of the investment cycle.

For investors, the current market volatility presents a unique opportunity to start investing for the long term through SIPs and STPs. Multi-asset allocation funds, which diversify investments across diverse asset classes like stocks, bonds, gold and silver, offer added stability in uncertain times. Balanced advantage funds, which adjust their stock allocations based on market valuations, are also an excellent choice. A strong core portfolio should focus on a mix of well-established large-cap stocks, alongside small- and mid-cap funds, to balance stability with growth potential.

The recent launch of the ABSL Conglomerate Fund underscores a strategic emphasis on India's economic growth. This fund targets well-established conglomerates with diverse business portfolios, driving the nation’s economic development and delivering value to stakeholders. The long-term growth trajectory of these groups aligns with India's economic path, offering investors a unique opportunity to capitalize on growth opportunities.

Looking ahead to 2025, it is expected to be a year of significant changes and opportunities. By staying informed and maintaining a diversified, long-term investment strategy, investors can navigate the complexities of this changing environment and reach their financial goals.

Happy Investing!

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Regards,
A. Balasubramanian