India’s top performing mutual fund schemes in February 2025

4 Mar 2025 , 09:24 AM

FPIS SOLD OVER $12.9 BILLION IN INDIAN EQUITIES IN JAN-FEB 2025

Year 2025 has begun on a dull note for equity markets in terms of FPI flows. After $9.01 Billion of FPI equity outflows in January, the month of February saw another $3.90 Billion of equities being sold. This takes the FPI selling in January and February to over ₹1,12,000 Crore or $12.91 Billion. To add insult to injury, even the IPO flows have dried up. In February, it was not just the Nifty; but even the smaller indices took it on their chin. For February 2025, Sensex fell (-5.55%), Nifty-50 fell (-5.89%), Nifty Mid-Cap fell (-10.79%), and Nifty Small Cap lost (-13.07)%. In the last two months, the fall in the mid-cap and the small caps has been especially sharp.

BENCHMARK BOND YIELDS SURGE IN FEBRUARY 2025

After bond yields had tapered in January on expectations of a rate cut; the bond yields on the benchmark 10-year bond rallied sharply in February. The monetary policy has almost underlined that the next rate cut may not be coming any time soon. For instance, the bond benchmark yields opened the month of February at 6.65%, went up to 6.85%, and closed the month around these levels. Despite the budget keeping the fiscal deficit in check, bond markets are worried that the global uncertainty may lead to a spike in the trade deficit. Also, the market believes that with the USDINR fairly vulnerable at ₹87.50/$, the RBI would be cautious on further rate cuts, as it has the potential to further weaken the Indian rupee.

Here is a quick dekko at how various equity, debt, and hybrid mutual fund categories performed in February 2025.

1. Equity Large-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Nippon India Large Cap Fund (G)	3.409%	18.584%	19.978%
ICICI Pru Bluechip Fund (G)	3.228%	15.448%	19.269%
HDFC Large Cap Fund (G)	1.249%	15.784%	18.531%
Category Average	1.710%	11.891%	15.502%
Data Source: Morningstar

2. Equity Multi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Active Fund (G)	-10.713%	13.015%	27.202%
Mahindra Manulife Multi (G)	0.212%	16.794%	23.195%
Nippon India Multi Cap (G)	5.263%	22.220%	22.935%
Category Average	1.324%	16.481%	20.447%
Data Source: Morningstar

3. Equity Flexi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Flexi Cap Fund (G)	-9.521%	17.533%	30.599%
PPFAS Flexi Cap Fund (G)	11.634%	18.393%	25.149%
HDFC Flexi Cap Fund (G)	10.051%	22.213%	24.152%
Category Average	1.317%	12.877%	17.198%
Data Source: Morningstar

4. Equity Mid-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Mid-Cap Fund (G)	-8.051%	20.052%	30.342%
Motilal Oswal Mid-Cap Fund (G)	16.854%	28.459%	27.792%
Edelweiss Mid-Cap Fund (G)	9.458%	22.014%	26.504%
Category Average	3.054%	17.497%	21.899%
Data Source: Morningstar

5. Equity Small-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Small Cap Fund (G)	-8.383%	21.722%	40.830%
Bandhan Small Cap Fund (G)	9.708%	25.203%	32.969%
Nippon Small Cap Fund (G)	-1.396%	21.282%	30.172%
Category Average	-1.197%	16.729%	25.425%
Data Source: Morningstar

6. Balanced Funds (Aggressive Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Absolute Fund (G)	-6.593%	12.898%	23.530%
JM  Aggressive Hybrid Fund (G)	3.402%	20.077%	23.238%
ICICI Pru Equity & Debt Fund (G)	5.180%	17.110%	22.296%
Category Average	3.653%	12.072%	15.371%
Data Source: Morningstar

7. Dynamic Asset Allocation Funds (BAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HDFC BAF (G)	4.773%	19.783%	20.923%
Baroda BNP Paribas BAF (G)	2.868%	11.845%	15.409%
Edelweiss BAF (G)	3.290%	10.835%	14.826%
Category Average	2.956%	10.455%	11.629%
Data Source: Morningstar

8. Multi-Asset Allocation Funds (MAAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Multi-Asset Fund (G)	4.003%	19.813%	27.507%
ICICI Pru Multi-Asset Fund (G)	12.239%	18.513%	22.673%
HDFC Multi-Asset Fund (G)	8.498%	13.170%	15.761%
Category Average	6.886%	13.153%	16.097%
Data Source: Morningstar

9. Arbitrage Funds (Cash-Futures)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Invesco Arbitrage (G)	8.014%	7.471%	6.225%
Tata Equity Arbitrage Fund (G)	7.980%	7.149%	6.212%
Edelweiss India Arbitrage (G)	8.029%	7.229%	6.200%
Category Average	7.397%	6.555%	5.441%
Data Source: Morningstar

10. Government Securities Funds (Gilt Funds)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Edelweiss Gilt Investment Fund (G)	7.726%	6.869%	7.442%
ICICI Prudential Gilt Fund (G)	8.148%	7.655%	7.415%
Kotak Gilt Fund (G)	7.365%	7.059%	7.064%
Category Average	7.354%	6.482%	6.125%
Data Source: Morningstar

11. Corporate Bond Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Axis Corporate Debt Fund (G)	8.312%	7.019%	7.207%
ABSL Corporate Bond (G)	8.289%	6.967%	7.152%
ICICI Pru Corporate Bond (G)	8.101%	7.221%	7.081%
Category Average	7.822%	6.287%	6.342%
Data Source: Morningstar

12. Credit Risk Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-25):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
BOI Credit Risk Fund (G)	5.305%	37.590%	9.892%
ABSL Credit Risk Fund (G)	16.718%	11.021%	9.887%
DSP Credit Risk Fund (G)	13.625%	13.714%	9.737%
Category Average	8.768%	9.620%	7.214%
Data Source: Morningstar

Having seen returns for various categories of funds for February 2025, some key takeaways.

WHAT WE READ FROM THE JANUARY 2025 MUTUAL FUND RANKINGS

Here are some key trends we deciphered from the rankings MFs in December 2024.

1. Most equity funds have taken a sharp hit in terms of 1-year returns, although longer term returns have not been meaningfully impacted.
2. Returns on debt funds faced some pressure in February as the bond yields hardened. However, credit risk funds and arbitrage funds were the star performers.
3. Lastly, the winners across categories (debt, equity, and hybrid) have been consistent with over 95% repetitions. Past returns seem to be a good index of the future!