FPIS SOLD $13.4 BILLION IN INDIAN EQUITIES IN FISCAL 2025
As fiscal year 2024-25 comes to an end, it has been an eventful year. FPIs were net sellers in equities to the tune of $(13.42) Billion, but FY25 was also partly redeemed by FPI debt inflows to the tune of $5.51 Billion. What about March index performance? In March 2025, the Sensex rallied +5.76%, Nifty-50 up +6.30%, Nifty Mid-Cap surged +7.84%, and Nifty Small Cap also rallied by +9.49%. There was index buying led by global MSCI index rebalancing, but the demand for small and mid-cap stocks came largely from retail investors. However, the reciprocal tariffs continue to be an overhang on equity market performance.
BENCHMARK BOND YIELDS FALL SHARPLY IN MARCH 2025
After bond yields rallied in February 2025 to 6.85% on global economic uncertainty; it fell rapidly in March. There were several triggers in March 2025. Firstly, RBI cut rates by 25 bps and the language hinted at another 2 to 3 rate cuts in FY26. That helped depress the bond yields. Secondly, a spike in FPI demand for FAR bonds in March 2025 resulted in a spike in the price of these bonds and a consequent fall in bond yields. Thirdly, the rupee hardened from ₹87.50/$ to ₹85.50/$ pushing down yields. Lastly, H1FY26 borrowing calendar signals lower risk of a fiscal deficit surge. Here is a quick dekko at how various equity, debt, and hybrid mutual fund categories performed in March 2025.
- Equity Large-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Nippon India Large Cap Fund (G) | 7.698% | 19.109% | 29.221% |
| ICICI Pru Bluechip Fund (G) | 7.662% | 16.894% | 27.255% |
| HDFC Large Cap Fund (G) | 5.611% | 16.498% | 26.347% |
| Category Average | 6.675% | 13.226% | 24.755% |
| Data Source: Morningstar | |||
- Equity Multi-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Active Fund (G) | -4.386% | 12.370% | 35.315% |
| Nippon India Multi Cap (G) | 10.956% | 22.105% | 33.965% |
| Mahindra Manulife Multi Cap (G) | 8.228% | 17.570% | 31.674% |
| Category Average | 8.559% | 17.322% | 29.358% |
| Data Source: Morningstar | |||
- Equity Flexi-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Flexi Cap Fund (G) | -0.992% | 17.610% | 38.191% |
| HDFC Flexi Cap Fund (G) | 15.744% | 23.027% | 33.016% |
| PPFAS Flexi Cap Fund (G) | 14.659% | 17.800% | 31.467% |
| Category Average | 7.317% | 14.115% | 25.089% |
| Data Source: Morningstar | |||
- Equity Mid-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Mid-Cap Fund (G) | -2.357% | 18.839% | 38.671% |
| Motilal Oswal Mid-Cap Fund (G) | 18.168% | 28.710% | 38.518% |
| Edelweiss Mid-Cap Fund (G) | 19.181% | 23.714% | 36.898% |
| Category Average | 10.732% | 18.944% | 31.535% |
| Data Source: Morningstar | |||
- Equity Small-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Small Cap Fund (G) | 0.744% | 21.863% | 51.829% |
| Nippon Small Cap Fund (G) | 6.922% | 21.694% | 41.871% |
| BOI Small Cap Fund (G) | 11.204% | 18.393% | 38.699% |
| Category Average | 8.357% | 17.679% | 36.099% |
| Data Source: Morningstar | |||
- Balanced Funds (Aggressive Allocation)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Absolute Fund (G) | -0.520% | 12.663% | 29.888% |
| JM Aggressive Hybrid Fund (G) | 8.829% | 20.713% | 29.585% |
| BOI Equity & Debt Fund (G) | 7.938% | 17.536% | 29.298% |
| Category Average | 8.554% | 13.197% | 21.637% |
| Data Source: Morningstar | |||
- Dynamic Asset Allocation Funds (BAF)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| HDFC BAF (G) | 9.268% | 20.525% | 27.472% |
| Baroda BNP Paribas BAF (G) | 8.288% | 13.260% | 19.599% |
| ICICI Prudential BAF (G) | 8.270% | 12.561% | 18.540% |
| Category Average | 6.639% | 11.446% | 15.929% |
| Data Source: Morningstar | |||
- Multi-Asset Allocation Funds (MAAF)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Multi-Asset Fund (G) | 8.866% | 19.042% | 35.275% |
| ICICI Pru Multi-Asset Fund (G) | 14.149% | 19.322% | 28.937% |
| Tata Multi-Asset Fund (G) | 8.631% | 14.139% | 21.473% |
| Category Average | 9.797% | 13.824% | 21.038% |
| Data Source: Morningstar | |||
- Arbitrage Funds (Cash-Futures)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Invesco India Arbitrage Fund (G) | 8.099% | 7.670% | 6.292% |
| Kotak Equity Arbitrage Fund (G) | 8.153% | 7.510% | 6.245% |
| Tata Arbitrage Fund (G) | 8.070% | 7.382% | 6.243% |
| Category Average | 7.461% | 6.775% | 5.527% |
| Data Source: Morningstar | |||
- Government Securities Funds (Gilt Funds)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| ICICI Prudential Gilt Fund (G) | 9.230% | 8.277% | 7.663% |
| Edelweiss G-Sec Fund (G) | 9.364% | 7.704% | 7.576% |
| DSP Gilt Fund (G) | 9.731% | 8.189% | 7.398% |
| Category Average | 9.018% | 7.241% | 6.478% |
| Data Source: Morningstar | |||
- Corporate Bond Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Axis Corporate Debt Fund (G) | 8.990% | 7.321% | 7.398% |
| ABSL Corporate Bond (G) | 8.917% | 7.230% | 7.348% |
| ICICI Pru Corporate Bond (G) | 8.548% | 7.509% | 7.270% |
| Category Average | 8.436% | 6.621% | 6.555% |
| Data Source: Morningstar | |||
- Credit Risk Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| DSP Credit Risk Fund (G) | 22.490% | 14.382% | 11.462% |
| ABSL Credit Risk Fund (G) | 17.085% | 11.186% | 10.056% |
| BOI Credit Risk Fund (G) | 5.302% | 37.682% | 9.894% |
| Category Average | 9.818% | 9.941% | 7.961% |
| Data Source: Morningstar | |||
Having seen returns for various categories of funds for March 2025, some key takeaways.
WHAT WE READ FROM THE MARCH 2025 MUTUAL FUND RANKINGS
Here are some key trends we deciphered from the rankings MFs in March 2025.
- Most equity funds bounced back sharply in March 2025, and that is evident in the one year returns of most equity oriented funds.
- Returns on debt funds were also sharply better than the previous month due to the sharp fall in the bond yields during the month.
- Lastly, the winners across categories (debt, equity, and hybrid) have been consistent with over 90% repetitions. Past returns seem to be a good index of the future!