The mutual fund industry has shown robust participation in newly listed companies, with total investments amounting to over Rs 5,294 crore across recent IPOs in the quarter ended in June 2025, according to a study by Ventura Securities.
A majority of these new entrants fall under the smallcap category, with only one categorised as a mid cap. The data highlights the mutual fund industry’s strategic allocation towards smaller, scalable businesses that have the potential to deliver superior returns over time.
The study shows an analysis of 335 equity schemes across the top 20 AMCs (by AUM) for the Jan–Mar 2025 quarter reveals that 90% of schemes outperformed the Nifty 50 TRI, highlighting the index’s relative underperformance during the period. However, only 41% of schemes outperformed their respective category benchmarks, indicating tighter competition and more selective alpha generation
Invesco Mutual Fund led on benchmark outperformance, with 13 out of 16 schemes (81%) outperforming, marking the highest success rate among peers. Meanwhile, Mirae Asset Mutual Fund, Kotak Mutual Fund, Nippon Mutual Fund, Edelweiss Mutual Fund, Canara Robeco Mutual Fund, and Aditya Birla SL Mutual Fund saw all their equity schemes beat the Nifty, showcasing consistent delivery across portfolios.
Larger fund houses like ICICI Prudential Mutual Fund and Aditya Birla SL Mutual Fund had the highest absolute number of outperforming schemes vis-à-vis the Nifty, but benchmark outperformance remained more dispersed across mid-sized players.
The study says that small cap funds witnessed a 20% surge in assets under management (AUM), the highest among all categories. This sharp growth marks a significant reversal, as small cap funds climbed from the bottom of the rankings in the previous quarter to take the top spot, highlighting renewed investor confidence in high-growth, high-risk segments
In contrast, flexi cap, focused, and value/contra funds saw relatively muted growth ranging between 10% to 13.5%, while traditionally stable categories like large cap, ELSS, and dividend yield funds lagged behind, indicating a shift in sentiment toward more aggressive and alpha-seeking strategies.
The mutual fund holdings remain concentrated in a few key sectors, with Private Banks accounting for the largest share at 30% of the top 10 sectoral AUM (Rs 4.66 lakh crore). IT – Software and Pharmaceuticals follow with 15% and 13.5% shares respectively.
The top five sectors remained unchanged, but the bottom half saw notable reshuffling. Telecom – Services rose to sixth position (Rs 88,368 crore; 5.8%), reflecting increased investor interest in a sector poised for digital growth. Auto Ancillary, now at 4.5% (Rs 69,631 crore), entered the top 10 for the first time, displacing Hospitals & Healthcare.
Meanwhile, Power and Engineering, Construction saw slight declines in position, despite sizable allocations. The changes highlight selective portfolio realignment by fund managers, balancing sector rotation with long-term structural themes.
<h3>📬 Subscribe to our newsletter</h3>
<p>Get notified whenever we publish a new blog post.</p>