Mutual fund investors face style concentration as 40% of assets tilt towards value: CRISP report
Mutual fund investors in India may be facing hidden concentration risks despite diversifying across schemes and fund houses, according to Share.Market’s second CRISP Mutual Fund Scorecard for the June 2025 quarter. The analysis, based on five years of performance and portfolio data, found that nearly 40% of assets under management (AuM) are tilted towards the value investment style, making portfolios vulnerable to market cycles.
The report comes at a time when the number of unique mutual fund investors has more than doubled in five years, crossing 5.5 crore as of June 2025.
In the first quarter of FY26 alone, the industry added about 11 lakh new investors despite volatility in the markets.
Value dominates, momentum rising
Funds with a value tilt remained the most consistent performers across key categories such as large cap, midcap, ELSS, large and midcap, contra/value, and aggressive hybrid. Momentum-led funds outperformed in small cap and flexi cap segments, while quality-focused funds showed signs of recovery but continued to lag over a five-year horizon.
Consistency comes with risk
The Scorecard cautioned that strong performance consistency does not always translate to lower risk. About 25–30% of funds with “High” consistency in categories such as flexi cap, ELSS, focused, and aggressive hybrid were also rated “too high” on risk.
Quant AMC was highlighted for delivering high consistency across seven categories, though all of its funds carried higher-than-average volatility.
AMC rankings
Nippon India, HDFC, and ICICI Prudential were identified as the most consistent performers across fund categories. HDFC AMC leaned heavily on value-oriented strategies, while Nippon and ICICI Prudential maintained a mix of value tilt and style-neutral approaches. Edelweiss, with a Momentum tilt, and Franklin Templeton, with a value bias, also displayed consistency across five categories each.
Style concentration
The Scorecard noted that nearly 40% of AuM analysed were concentrated in value-style funds, while momentum accounted for just 14% and quality about 22%. Another 27% of assets had no clear style tilt.
The skew towards value reflects its recent outperformance, but the report warned that reliance on a single style could undermine true diversification.
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