80% Equity Mutual Funds Underperform: These 41 Funds Actually Beat The Market

After two fabulous years of high double-digit returns, 2025 disappointed mutual fund investors. 80 per cent equity funds were unable to match the returns generated by their benchmark this year, according to data from Ace Mutual Fund

As we approach the year-end, we compared the returns generated by equity mutual funds vis-à-vis their benchmark.  Here, we included funds falling in categories like large cap, mid cap, small cap, large & mid cap, multi cap, flexi cap, value funds, contra funds and tax saving (Equity Linked Savings Scheme, ELSS) funds only. We applied one more filter here. We considered only those funds that have completed a minimum of five years since their launch.

This gave us a list of 211 funds. When we compared their year-to-date returns, as of November 21, 2025, to their benchmark, we found that 170 of these funds underperformed their benchmark index.

BSE Sensex, an index that represents the largest 30 companies of the country, grew by 8.67 per cent year to date. Another benchmark index, Nifty 50, that represents the largest 50 companies of the country, was up by 9.87 during the same time period. And, the broader market index Nifty 500 was up y 6.04 per cent year to date.

The 170 underperforming mutual funds hold Rs 16.73 lakh crore worth of investors'  assets.

Some prominent names among the worst performers are Motilal Oswal Midcap Fund (Rs 37,500 crore in assets under management, AUM), DSP Small Cap Fund, managing Rs 16,868 crore of assets, HDFC Small Cap Fund (Rs 38,412 crore), and Bandhan Small Cap (Rs 17,380 crore). These funds have underperformed their benchmark index by a minimum of 10 percentage points and hold a significant AUM worth Rs 10,000 crore or more.

Which are the Best-Performing Mutual Funds in 2025?

Coming to the equity mutual funds that outperformed their benchmark despite an overall muted performance by the equity funds during the year. Out of 211 funds, 41 funds outperformed their benchmark. These funds either generated higher returns vis-à-vis their benchmark or fell less than it.

32 out of these 41 funds generated positive returns for their investors, year to date.

Before we disclose the names, it is important to know that one year is too short a time period to evaluate the performance of an equity mutual fund. As they invest in companies, and thus the stock market, they tend to be volatile in the short term. Do not invest based on the performance of funds in the one-year period. Instead, look for funds that have performed consistently well across market cycles. Also, if you are looking to invest in equity mutual funds, always invest with a long horizon of at least seven years or longer. Treat this information for educational purposes only.

Coming back to the 2025 outperformers. The funds that gave at least 12 per cent returns while outshining their benchmark include names like -- SBI Focused Fund (13.55 per cent returns year-to-date), ICICI Pru Large & MidCap Fund (14.06 per cent), ICICI Pru Value Fund (12.99 per cent), ICICI Pru Dividend Yield Equity Fund (12.03 per cent), Kotak Focused Fund( 12.01 per cent) and ICICI Pru Focused Equity Fund (13.98 per cent).

Other big funds that outperformed their benchmark with positive double-digit returns between 10 and 12 per cent include names like HDFC Flexi Cap Fund, the second largest fund in the flexi cap space holding assets worth over Rs 91,000 crore ( 11.57 per cent), ICICI Pru Large Cap Fund (11.41 per cent), HDFC Focused Fund (11.21 pr cent), ABSL Flexi Cap Fund (10.01 per cent), HDFC ELSS Tax Saver (10.38 per cent), ICICI Pru ELSS Tax Saver (10.57 per cent.

The complete list of funds that outperformed their benchmark in 2025 is given below.