MF investment: 18 equity funds deliver zero returns in 2025, Rs 1.29 lakh crore of investor money hit

In a year marked by heightened volatility and sharp sectoral divergences, at least 18 equity mutual funds have delivered zero or negative returns over the last 12 months, disappointing lakhs of investors who entered the markets with expectations of steady wealth creation. These funds, spread across small-cap, flexi-cap, ELSS, multi-cap, mid-cap, focused and value categories, collectively manage a massive Rs 1.29 lakh crore, according to ACE Mutual Fund data as of October 31, 2025.

Of the 18 laggards, 12 funds actually posted negative returns, underscoring the uneven performance across equity segments this year. Small-cap schemes were hit hardest, with seven small-cap funds appearing on the list of zero-return disappointments.

Among the largest schemes affected are some marquee names. SBI Small Cap Fund, the category’s biggest with Rs 36,945 crore in assets, delivered a muted 0.6% return in the last one year (as of November 15, 2025). Kotak Small Cap Fund saw a sharper decline at –2.70%, while HSBC Small Cap Fund posted –2.20%. Franklin India Small Cap Fund managed a modest 0.94%, and Tata Small Cap Fund fell steeply by –6.25% over the same period.

These large small-cap strategies collectively manage tens of thousands of crores, amplifying the impact of subdued performance on investor portfolios.

Other widely held funds across categories also struggled. The Quant Multi Cap Fund returned only 0.14%, Quant Mid Cap Fund slipped –0.15%, JM Flexi Cap Fund declined –0.83%, and the relatively new NJ Flexi Cap Fund delivered –1.26%. In the small-cap segment, Bank of India Small Cap Fund returned 0.63%, while Motilal Oswal Focused Fund fell –1.01%. JM Value Fund also lagged at 0.16%. These funds hold assets ranging between ₹1,000 crore and ₹10,000 crore.

The worst performer among the zero-return group was Samco Flexi Cap Fund, which plunged –11.32% in the last one year. It was followed by Tata Small Cap Fund, Samco ELSS Tax Saver Fund, Samco Multi Cap Fund, and Kotak Small Cap Fund. The Samco schemes have been among the deepest losers in 2025 so far.

Returns in 2025

Broader industry data reinforces this trend. An analysis by IndMoney of 279 equity mutual funds as of October 27, 2025, shows that 46 funds delivered negative returns during the year.

The biggest losers in 2025 (year-to-date) include:

Samco Flexi Cap Fund: –15.49%

LIC MF Small Cap Fund: –10.46%

Samco ELSS Tax Saver Fund: –8.99%

HSBC Small Cap Fund: –7.78%

Motilal Oswal Midcap Fund: –6.70%

LIC MF Value Fund: –6.64%

Despite these setbacks, the broader market narrative remains mixed. Of the 279 funds studied, 233 delivered positive returns, with several posting double-digit gains—even as small-cap and flexi-cap categories struggled.

Top performers included:

ICICI Prudential Large & Mid Cap Fund: +13.77%

ICICI Prudential Focused Equity Fund: +13.29%

SBI Focused Fund: +12.72%

Several ELSS funds, such as HDFC ELSS Tax Saver, ICICI Prudential ELSS, and Aditya Birla Sun Life ELSS, also delivered strong double-digit returns, highlighting the divergence within categories.

Experts say the weak performance in pockets reflects marketwide corrections in small-cap and mid-cap segments after years of outperformance. They also caution that one-year returns are too short a window to judge equity funds, which should be evaluated over seven years or more, given the inherent volatility of equities.