Many equity mutual funds outperformed market benchmarks like Nifty50 and Sensex in the last year. Experts suggest investors focus on consistent performance across market cycles instead of chasing short-term gains. SIPs or STPs are recommended due to current market levels. Diversified equity funds are favored for stability. Investors should align investments with their risk profile and financial goals.

Over 100 equity mutual funds offer market beating returns in 1 year. Should you chase them for investing?

100+ Mutual Funds Beat the Market: A Year in Review

In a surprising twist, over 100 equity mutual funds outperformed both the Nifty 50 and BSE Sensex in the last year, even as the benchmark indices saw slight declines (Nifty 50: -1.19%, BSE Sensex: -1.12%). This achievement is even more remarkable considering the muted performance of large, mid, and small-cap indices.

The Winning Strategy: This outperformance wasn't a result of a broad market rally. According to Sagar Shinde, VP of Research at Fisdom, the success stemmed from strategic stock picking and targeted sector exposure. "Selective active stock-picking and exposure to specific sectors that bucked the trend" were key factors, he explains. However, he cautions that such results aren't guaranteed annually, emphasizing the importance of consistent performance over chasing short-term gains.

Market Performance Highlights:

Nifty Microcap 250 - TRI: -7.13% (last year), -7.08% (2025 YTD)
Nifty Midcap 150 - TRI: -2.39% (last year)
Nifty Smallcap 250 - TRI: -6.85% (last year), -5.28% (2025 YTD)
BSE Sensex & Nifty 50 (last six months): +8.28% and +9.59% respectively
BSE Sensex & Nifty 50 (2025 YTD): +3.38% and +4.51% respectively

Top Performing Funds:

Several funds delivered impressive returns:

Motilal Oswal Multi Cap Fund: 16.43%
Invesco India Midcap Fund: 11.24%
Invesco India Large & Mid Cap Fund: 9.25%
HDFC Flexi Cap Fund: 6.20%
Parag Parikh Flexi Cap Fund: 6.08%

Interestingly, around 27 funds even outperformed the benchmark indices' negative returns, showcasing resilience in a challenging market.

Investing Wisely:

Should you invest now? Shinde advises against basing investment decisions solely on past performance. He recommends focusing on consistent performance across market cycles and utilizing Systematic Investment Plans (SIPs) or Systematic Transfer Plans (STPs) to manage volatility, especially with markets at elevated levels. Proper portfolio diversification and alignment with individual risk profiles are crucial.

Long-Term Perspective:

While some funds delivered exceptional short-term results, Shinde stresses that short-term market-beaters aren't guaranteed long-term success. Consistency, risk management, and alignment with your investment timeframe are paramount for long-term wealth creation. He suggests diversified equity funds (flexi-cap, multi-cap, large-cap) as a core portfolio, with potentially selective additions of mid-cap or small-cap funds for higher-risk appetites.

Disclaimer: The views expressed are those of the expert and do not represent the views of The Economic Times.