Only 26% of equity MFs outperformed respective benchmarks in January 2025

The assets under management ( AUM) of equity mutual funds have fallen by 3.83% sequentially to Rs 24,85,844 crore in January 2025 from Rs 25,84,851 crore in December 2024 excluding Sectoral / Thematic Funds), said PL Wealth Management,  Prabhudas Lilladher’s Wealth Management arm, in its latest study on mutual fund performance.

 

The study, which is based on 291 open-ended equity diversified funds,  said that only 26.12% of these funds have outperformed their respective benchmarks over the past one month, ending January 31st, 2025. The cumulative total of funds that outperformed stood at 76 during the month ending January 31st, 2025 (one month). 2025. In the previous month, 60.82% of the schemes were able to beat their benchmarks. 

 

Small Cap Funds was the best performing category where 86.21% of the schemes outperformed the benchmark. It was followed by schemes of Equity Linked Savings Schemes and Focused Funds which outperformed their respective benchmarks by 31.71% and 28.57%, respectively during the month of January 2025.

 

Large Cap funds were the least performing fund category with only 0.00% of funds outperforming the benchmark. 

For the 1-year ended January 2025, returns of Nifty 50 TRI, Nifty Mid Cap 150 TRI & Nifty Small Cap 250 TRI returns were 9.58%, 11.60 & 5.89%, respectively.

 

Out of the 276 open-ended equity diversified funds for a 1-year returns metric, about 70.29% of the funds were able to outperform their respective benchmarks over the past

one year, ended January 31st, 2025. In the previous month for a 1-year return metric, 71.27% of the schemes were able to beat their benchmarks.

 

"Investors are advised to stick to their SIP investments and keep a long-term focus. SIPs over the past 3-years have yielded a return more than 15% p.a. on an average for the top quartile equity funds," said Prabhudas Liladhar in a note.  Top Mutual Funds: 1 Month Returns 

Large-Cap Funds Struggle with Minor Losses

Large-cap funds, typically considered a safe bet for long-term investors, experienced minor declines during the month. Among the best-known funds in this category:

 

UTI Large Cap Fund-Reg(G) posted a marginal loss of -0.73%, with assets under management (AUM) of ₹12,616.62 crore. 

ICICI Pru Bluechip Fund(G), one of the largest in the large-cap category with AUM of ₹63,264.30 crore, dropped -1.22%.

Mahindra Manulife Large Cap Fund-Reg(G) suffered a larger dip of -1.33%, with an AUM of ₹588.74 crore, under the management of Fatema Pacha.

 

Mid-Cap Funds Face Greater Turbulence

Mid-cap funds experienced more significant declines in January 2025, in line with the broader market's weakness, especially in the mid-cap and small-cap segments.

Quant Mid Cap Fund(G) dropped -3.24%, with AUM of ₹8,891.20 crore.

SBI Magnum Midcap Fund-Reg(G) saw a drop of -3.89% in January 2025, with AUM at ₹21,818.37 crore, managed by Bhavin Vithlani.

Tata Mid Cap Growth Fund-Reg(G) posted the largest decline among mid-caps with -5.61%, with AUM of ₹4,529.49 crore, managed by Satish Chandra Mishra.

 

Large & Mid-Cap Funds: Mixed Results

The combination of large and mid-cap stocks produced mixed results across the board:

 

• ICICI Pru Large & Mid Cap Fund(G) saw a positive return of 0.74%, with an AUM of ₹17,679.54 crore.
• On the other hand, Quant Large & Mid Cap Fund(G) posted a loss of -2.97%, while SBI Large & Midcap Fund-Reg(G) dropped -3.27%, showing the ongoing struggles in this category.

 

Small-Cap Funds: Suffering the Most

Small-cap funds took the hardest hit during January 2025, reflecting the ongoing market weakness in the small-cap segment. Notable losses include:

• ICICI Pru Smallcap Fund(G) suffered a -4.93% drop, with an AUM of ₹8,257.98 crore, managed by Anish Tawakley.
• Sundaram Small Cap Fund(G) experienced a steep decline of -6.91%, while Quant Small Cap Fund(G) faced the largest drop at -7.29%, reflecting the high volatility of the small-cap space.

 

Multi-Cap Funds Show Moderate Losses

Multi-cap funds, which invest across various market segments, managed to limit losses more effectively than their smaller counterparts. Some top performers include:

 

• ICICI Pru Multicap Fund(G) posted a loss of -2.25%, with AUM of ₹14,019.22 crore, under the management of Sankaran Naren.
• SBI Multicap Fund-Reg(G) saw a drop of -3.47%, while Quant Active Fund(G) had a larger loss of -4.39%, reflecting the broader market trends.

 

Flexi-Cap Funds and Focused Funds: Largely in Negative Territory

• Flexi-cap funds, known for their ability to invest across large, mid, and small-cap stocks, saw mixed results:
• Parag Parikh Flexi Cap Fund-Reg(G) had a relatively smaller loss of -0.33%, with AUM of ₹87,539.41 crore.
• Tata Flexi Cap Fund-Reg(G) and HDFC Flexi Cap Fund(G) experienced more significant declines of -0.91% and -2.44%, respectively.

 

Focused funds, which invest in a concentrated number of stocks, were also largely negative, with SBI Focused Equity Fund-Reg(G) posting the smallest loss of -0.01% and Quant Focused Fund(G) declining by -1.24%.

 

Performance of Equity Linked Savings Schemes (ELSS)

Equity Linked Savings Schemes (ELSS) continued to show weaknesses, with all major funds in the category posting negative returns:

 

• Parag Parikh ELSS Tax Saver Fund-Reg(G) lost -1.63%, while ICICI Pru ELSS Tax Saver Fund(G) and HDFC ELSS Tax Saver(G) also posted declines of -2.10% and -2.26%, respectively.

 

Benchmark Performance

 

The benchmark indices showed varied performances in January:

 

• NIFTY 50 - TRI posted a slight decline of -0.45%.
• The NIFTY 500 - TRI faced a steeper drop of -3.47%.
• The Nifty Midcap 150 - TRI dropped -6.09%, while the Nifty Smallcap 250 - TRI suffered the most significant fall, declining -10.69%.

Category-wise Performance of Equity Mutual Funds