The study highlights that mutual fund schemes backed several new listings, with Ather Energy (₹1,351 crore), HDB Financial Services (₹1,331 crore), and Schloss Bangalore (₹679 crore) among the top beneficiaries.
Notably, eight of the nine companies receiving allocations were classified as small caps under SEBI norms, with HDB Financial being the only mid cap.
This trend signals a shift by mutual funds towards early-stage, scalable businesses. Ventura notes that these investments reflect growing conviction in small cap companies’ ability to deliver higher long-term returns.
Equity funds outperform Nifty, mixed results against benchmarks
The report also analysed 335 equity schemes across the top 20 AMCs by AUM for the January–March 2025 quarter. It found that 90% of schemes outperformed the Nifty 50 TRI, underlining the index’s relative underperformance during the period.
However, only 41% of schemes beat their respective category benchmarks.
Invesco Mutual Fund posted the strongest benchmark outperformance, with 81% (13 out of 16) of its schemes exceeding their category benchmarks. Mirae, Kotak, Nippon, Edelweiss, Canara Robeco, and Aditya Birla Sun Life Mutual Fund had all their equity schemes outperform the Nifty.
Larger AMCs such as ICICI Prudential and Aditya Birla Sun Life had the highest number of schemes beating the Nifty, though benchmark outperformance was more dispersed among mid-sized fund houses.
Small cap funds lead AUM growth
Small cap funds saw the sharpest increase in assets under management (AUM), rising 20% in the June quarter — the highest among all equity fund categories. This marks a reversal from the previous quarter, where small cap funds had ranked lowest in AUM growth.
Mid cap (17%) and multi cap (16.5%) funds also posted strong AUM increases, reflecting a broader investor appetite for diversified exposure beyond large caps. The large & mid cap segment followed with a 14.8% increase, while sectoral/thematic funds grew by 11.9%, supported by interest in manufacturing, defense, and electric vehicle themes.
In contrast, traditionally stable categories such as large cap, ELSS, and dividend yield funds saw subdued growth, indicating a shift toward more aggressive and return-seeking strategies among investors.
Sectoral allocation: Telecom and auto ancillary gain ground
Mutual fund holdings remained concentrated in core sectors. Private Banks topped the list, representing 30% of the total sectoral AUM among the top 10 sectors (₹4.66 lakh crore), followed by IT – Software (15%) and Pharmaceuticals (13.5%).
However, shifts were observed in the bottom half of the top 10. Telecom – Services rose to sixth position with ₹88,368 crore (5.8%), while Auto Ancillary entered the top 10 for the first time with a 4.5% share (₹69,631 crore), replacing Hospitals & Healthcare.
Allocations to Power and Engineering & Construction sectors declined marginally, suggesting fund managers are selectively rotating portfolios while remaining aligned with long-term growth themes.
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