FPIS TURN NET BUYERS IN EQUITY AND DEBT IN MAY 2025
For the month of May 2025, FPIs were net buyers overall to the tune of ₹30,950 Crore in Indian markets. This included ₹19,860 Crore of buying in equities and ₹11,090 Crore of buying in debt. Debt buying was triggered by lower fiscal deficit, rate cut hopes in June, and government relaxing FPI debt investment norms. In May 2025, Sensex rallied +1.51%, Nifty 50 rallied by +1.71%, Nifty Mid-Cap surged +6.09%, and Nifty Small Cap also closed +8.72% higher. The action has clearly shifted to alpha hunting in smaller stocks in May 2025. This outperformance by smaller stocks is reflected in the superior performance of multi-cap and flexi cap funds, as well as the mid-cap and small cap funds in May 2025.
BENCHMARK BOND YIELDS REPEAT FALL IN MAY 2025
Bond yields fell for the second month in a row in May 2025. In April, the 10-year bond yield had fallen from 6.51% to 6.32%; and in May it fell further to 6.18%. There were several factors behind this sharp fall in bond yields. There are hopes of 25 bps rate cut by the RBI in its June policy and probably one more this year. Secondly, the fiscal deficit was manged at 4.77% for FY25, well within its 4.8% revised target. Now 4.4% for FY26 looks possible. Above all, the government easing norms for bond purchases by FPIs increased demand, pulling down yields further. Here is a look at equity, debt, and hybrid funds in May 2025.
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Nippon India Large Cap Fund (G) | 11.425% | 23.250% | 28.951% |
| ICICI Pru Bluechip Fund (G) | 11.746% | 20.550% | 25.506% |
| HDFC Large Cap Fund (G) | 7.553% | 19.054% | 25.010% |
| Category Average | 9.145% | 17.201% | 22.111% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Nippon India Multi Cap (G) | 10.959% | 28.133% | 35.646% |
| Quant Active Fund (G) | -5.475% | 17.713% | 32.172% |
| Mahindra Manulife Multi Cap (G) | 9.814% | 23.231% | 30.652% |
| Category Average | 9.962% | 22.187% | 28.572% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Flexi Cap Fund (G) | -2.631% | 22.435% | 34.870% |
| HDFC Flexi Cap Fund (G) | 15.910% | 25.847% | 32.098% |
| JM Flexi Cap Fund (G) | 4.158% | 27.120% | 29.519% |
| Category Average | 9.105% | 18.875% | 24.073% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Motilal Oswal Mid-Cap Fund (G) | 20.791% | 33.310% | 39.549% |
| Edelweiss Mid-Cap Fund (G) | 18.606% | 29.501% | 35.969% |
| Nippon India Growth Fund (G) | 13.990% | 29.160% | 35.692% |
| Category Average | 10.508% | 24.441% | 30.981% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Small Cap Fund (G) | 2.245% | 28.973% | 50.267% |
| Nippon Small Cap Fund (G) | 7.382% | 28.696% | 41.419% |
| Bandhan Small Cap Fund (G) | 22.897% | 33.916% | 39.715% |
| Category Average | 10.439% | 24.199% | 36.320% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| BOI Equity and Debt Fund (G) | 10.789% | 23.266% | 29.418% |
| JM Aggressive Hybrid Fund (G) | 4.128% | 24.054% | 29.100% |
| Quant Absolute Fund (G) | 2.083% | 16.417% | 28.673% |
| Category Average | 10.456% | 16.803% | 21.103% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| HDFC BAF (G) | 8.465% | 22.383% | 27.027% |
| Baroda BNP Paribas BAF (G) | 11.282% | 17.343% | 19.242% |
| Edelweiss BAF (G) | 7.856% | 14.576% | 17.807% |
| Category Average | 8.342% | 13.740% | 15.241% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Multi-Asset Fund (G) | 8.199% | 23.220% | 34.421% |
| ICICI Pru Multi-Asset Fund (G) | 14.106% | 20.890% | 26.165% |
| Tata Multi-Asset Fund (G) | 10.519% | 16.979% | 20.841% |
| Category Average | 10.781% | 16.756% | 20.815% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Invesco India Arbitrage Fund (G) | 7.864% | 7.714% | 6.250% |
| Kotak Arbitrage Fund (G) | 7.854% | 7.606% | 6.185% |
| Tata Equity Arbitrage Fund (G) | 7.934% | 7.553% | 6.160% |
| Category Average | 7.221% | 6.907% | 5.492% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Edelweiss G-Sec Fund (G) | 10.762% | 8.983% | 7.383% |
| ICICI Prudential Gilt Fund (G) | 11.084% | 9.420% | 7.169% |
| SBI Magnum Gilt Fund (G) | 11.033% | 9.507% | 7.045% |
| Category Average | 10.669% | 8.570% | 6.193% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Nippon Corporate Bond (G) | 10.808% | 8.635% | 7.598% |
| Axis Corporate Debt Fund (G) | 10.757% | 8.507% | 7.546% |
| Franklin India Corporate Bond (G) | 11.277% | 8.264% | 7.289% |
| Category Average | 10.099% | 7.891% | 6.635% |
| Data Source: Morningstar | |||
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st May-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| BOI Credit Risk Fund (G) | 6.268% | 6.137% | 27.293% |
| DSP Credit Risk Fund (G) | 24.292% | 15.661% | 12.520% |
| Baroda BNP Credit Risk Fund (G) | 10.263% | 8.771% | 11.378% |
| Category Average | 11.886% | 9.020% | 9.946% |
| Data Source: Morningstar | |||
Having seen returns for various categories of funds for May 2025, some key takeaways.
WHAT WE READ FROM THE MAY 2025 MUTUAL FUND RANKINGS
Here are some key trends we deciphered from the MF rankings for May 2025.
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