India’s Largest Equity Mutual Funds: 2025 Returns vs Long-Term Performance

The year 2025 did not end on a very happy note for most equity mutual fund investors. Returns disappointed across categories, and even the largest funds struggled to deliver meaningful gains. Let’s look at how the biggest funds across equity categories performed in 2025 and what kind of returns an investor should expect from them over the long term.

Beginning with the flexi-cap category. In the actively managed space, Parag Parikh Flexi Cap Fund continues to stand apart in size. With massive assets worth Rs 1.29 lakh crore as on November 31, 2025, it is the only actively managed equity fund to cross the Rs 1 lakh crore mark. In 2025, the fund grew by 7.85 per cent. HDFC Flexi Cap Fund, the second-largest in the category, delivered 10.68 per cent returns. The flexi cap category as a whole performed poorly, delivering average returns of just 2.7 per cent in 2025. Median returns stood at 3.68 per cent, shows data from Ace Mutual Fund.

Large & Mid Cap funds, which are mandated to invest at least 35 per cent each in large-cap and mid-cap stocks, delivered average returns of 3.76 per cent. Among the largest funds, Mirae Asset Large & Midcap Fund delivered 7.88 per cent, SBI Large & Midcap Fund gave 9.39 per cent, and Kotak Large & Midcap Fund returned 5.15 per cent in 2025.

Coming to mid-cap funds. HDFC Mid Cap Fund, the largest in the category, delivered 6.5 per cent returns in 2025. The next two funds by size - Kotak Midcap Fund and Nippon India Growth Mid Cap Fund grew by just 1.83 per cent and 3.6 per cent, respectively. The category average return stood at 1.90 per cent, while median returns were even lower at 1.87 per cent.

Small-cap funds were the worst hit in 2025. Average category returns stood at negative 4.4 per cent, while median returns were negative 3.8 per cent. Nippon India Small Cap Fund, the largest in the category with assets worth Rs 68,571 crore, delivered negative 4.75 per cent returns in 2025. HDFC Small Cap Fund delivered zero returns, while SBI Small Cap Fund was down 5.06 per cent.

Large-cap funds fared relatively better. ICICI Prudential Large Cap Fund, the largest in the category, delivered 10.17 per cent returns in 2025. The next-largest fund, SBI Large Cap Fund, grew by 8.5 per cent, while Nippon India Large Cap Fund delivered 8.23 per cent. The category average stood at 6.5 per cent, with median returns of 7.01 per cent.

Multi-cap funds, which must invest at least 25 per cent each in large-, mid- and small-cap stocks, delivered average returns of 2.08 per cent in 2025. Median returns were 2.77 per cent. The largest fund in the category, Nippon India Multi Cap Fund, managing assets worth Rs 50,048 crore, grew by a modest 3.65 per cent. SBI Multi Cap Fund delivered 2.9 per cent, while Kotak Multi Cap Fund returned 5.6 per cent.

Coming to the contra fund category. The largest fund –SBI Contra Fund, delivered just 5.37 per cent returns over the last year. The fund manages assets worth Rs 49,837 crore.

A similar story played out in dividend yield funds. The largest fund in the category, SBI Dividend Yield Fund, managing assets worth Rs 9,181 crore, delivered gloomy returns of 4.77 per cent in 2025. The second-largest fund, ICICI Prudential Dividend Yield Fund, however, stole the show. It delivered 11.04 per cent returns in 2025, a year when most equity funds struggled to even reach double digits. The fund manages assets worth Rs 6,358 crore.

Value funds were among the few relatively bright spots. ICICI Prudential Value Fund, the largest in the category with assets worth Rs 60,390 crore, delivered 13.07 per cent returns in 2025. The second-largest fund, HSBC Value Fund, returned 5.71 per cent, while Bandhan Value Fund delivered 4.62 per cent. The category average stood at 4.19 per cent, and median returns were 4.62 per cent.

That said, investors should not lose faith or make decisions based on one-year returns. One year is a very short period to judge a mutual fund. Equity markets are volatile by nature, which is why experts consistently advise investors to stay invested for at least five to seven years when investing in equities.

Instead of focusing on point-to-point returns, investors should look at rolling returns. Rolling returns show the average annualised returns generated by a fund over multiple overlapping periods, giving a more realistic picture of long-term performance.

Because rolling returns are calculated using a large sample size, they help set more reasonable expectations for a fund. We have calculated five- and seven-year rolling returns, rolled on a daily basis since the inception of these funds. Since the multi-cap category was introduced only in 2020, we excluded rolling return analysis for that category.

Rolling return data across equity categories highlights how funds have performed over the long term. However, investors should not expect such returns over the short term. The table below shows one-year performance and the rolling returns of the largest equity funds across different categories.

Rolling returns of these funds look reassuring and would keep most investors happy. But these numbers need to be read with caution. Over the years, many of these schemes have gone through recategorisation. Some have been completely reshaped along the way. Fund managers have changed, investment mandates have shifted, and portfolios have evolved. In short, today’s fund is often not the same fund that generated those past returns.

So, when planning investments, it is always wise to work with lower, conservative return assumptions. Overestimating returns can lead to disappointment later.