India’s equity mutual fund industry delivered a surprisingly resilient performance during the March 2026 quarter despite one of the sharpest market corrections in recent years. While benchmark indices witnessed steep declines amid geopolitical uncertainty, foreign investor selling, and energy market disruptions, a majority of equity mutual fund schemes managed to outperform both their benchmarks and the Nifty 50 TRI during Q4FY26.
According to Ventura Securities’ “Mutual Fund Quarterly Booklet – Jan–Mar 2026”, nearly 62% of equity schemes outperformed their respective benchmarks during the quarter, while around 72% outperformed the Nifty 50 TRI. The report analysed 354 schemes across 20 asset management companies (AMCs).
The strong relative performance came during a difficult quarter for Indian equities. The Nifty 50 declined 14.6% during the March 2026 quarter after rising 4.4% in the previous quarter. The BSE Midcap index fell 13.4%, while the BSE Smallcap index declined 15.3%. Despite the sharp market correction, mutual fund inflows into equity schemes remained robust.
The report highlighted that the quarter was marked by significant macroeconomic stress globally. The disruption around the Strait of Hormuz severely affected India’s crude oil and LNG imports, increasing concerns around inflation, current account deficits, and rupee weakness. At the global level, the US-Israel military operation against Iran and the subsequent disruption in energy supply chains pushed oil prices sharply higher and triggered broad-based volatility across financial markets.
PPFAS, HSBC and Kotak emerge as standout performers
Among the top-performing AMCs, PPFAS Mutual Fund emerged as one of the strongest performers in Q4FY26, with both of its schemes outperforming their benchmarks as well as the Nifty 50 TRI, resulting in a 100% success rate.
HSBC Mutual Fund also stood out with 13 out of 14 schemes outperforming benchmarks, translating into a 93% success rate. Edelweiss Mutual Fund followed closely with 11 out of 12 schemes outperforming benchmarks, representing a 92% outperformance ratio.
Kotak Mutual Fund also delivered a strong showing, with 22 out of 25 schemes outperforming their benchmarks and 21 schemes beating the Nifty 50 TRI. Franklin Templeton Mutual Fund saw 9 out of 14 schemes outperform benchmarks.
The report stated, “Across 354 schemes from 20 AMCs, ~62% managed to outperform their benchmarks, and ~72% outperformed Nifty 50 TRI.”
It further added, “PPFAS, HSBC, Edelweiss, Kotak and Franklin Templeton stood out with the highest proportion of schemes outperforming their benchmarks at 100%, 93%, 92%, 88% and 83% respectively.”
Among large fund houses, SBI Mutual Fund recorded 18 schemes outperforming benchmarks and 19 beating the Nifty 50 TRI out of a total of 24 schemes analysed. ICICI Prudential Mutual Fund had 17 schemes outperform benchmarks and 23 schemes beat the Nifty 50 TRI out of 34 schemes. HDFC Mutual Fund saw 10 out of 22 schemes outperform benchmarks and 17 schemes outperform the Nifty benchmark.
Nippon India Mutual Fund delivered benchmark outperformance in 13 out of 17 schemes, while Axis Mutual Fund also saw 13 out of 17 schemes beat their benchmarks. DSP Mutual Fund had 10 out of 15 schemes outperform benchmarks, while Tata Mutual Fund recorded 12 outperforming schemes out of 20.
The report also showed that investors continued to favour diversified equity categories despite market volatility. Flexi Cap funds attracted the highest inflows during FY26 at ₹89,213 crore, contributing nearly 26% of total equity segment inflows. Small Cap, Mid Cap, and Large & Mid Cap funds followed closely, with these four categories together accounting for nearly 68% of total equity inflows during the year.
Among individual schemes, Parag Parikh Flexi Cap Fund emerged as the biggest equity fund by inflows during FY26, attracting ₹19,995 crore. HDFC Flexi Cap Fund followed with inflows of ₹13,941 crore, while Bandhan Small Cap Fund received ₹6,484 crore. HDFC Mid Cap Fund attracted ₹6,093 crore, and Nippon India Large Cap Fund saw inflows of ₹5,201 crore during the year.
Ventura Securities noted that flows strengthened sharply during Q4FY26, indicating renewed investor confidence despite volatile market conditions. The report added that investors continued to concentrate investments in well-known and consistent performers, especially diversified equity strategies such as flexi cap funds.
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