Mutual fund SIP: Only 3 of 519 equity MFs saw positive returns amid market downturn; what should you now?
The Indian equity market has faced a tumultuous six months, marked by a persistent sell-off from October 2024 to February 2025. The markets have experienced a correction, with the Nifty50 index declining by 14.6% from its peak in September 2024 to March 13. Similarly, the Nifty 500 index has seen a decrease of 17.6% over the same period. The Nifty Midcap 150 index recorded a loss of 20.4%, while the Nifty Smallcap 250 index suffered the steepest decline of 24.3% from the peak in September 2024.
Despite a recovery in March, the overall market has not recouped previous losses, with the S&P BSE Sensex and Nifty declining by 8.17% and 8.88%, respectively. This period has been particularly challenging for equity mutual funds, as only three out of 519 schemes managed to deliver positive returns, reflecting the broader market’s volatility.
The three mutual funds that have bucked this trend include two international funds — Aditya Birla Sun Life International Equity Fund and Nippon India US Equity Opportunities Fund — and Motilal Oswal Business Cycle Fund, a thematic equity fund.
Aditya Birla Sun Life International Equity Fund posted a return of 2.63%, whereas Motilal Oswal Business Cycle Fund and Nippon India US Equity Opportunities Fund yielded returns of 2.62% and 2.30%, respectively, over the last six months. These funds have demonstrated resilience amid broader market declines.
Aditya Birla Sun Life International Equity Fund
The Aditya Birla Sun Life International Equity Fund primarily invests in shares of foreign companies, offering geographical diversification that can be beneficial during periods of domestic market volatility. Aimed at investors with a long-term horizon, it provides exposure to high-growth international sectors like technology and consumer staples. Despite the potential for significant returns, investors must be aware of the risks associated with currency fluctuations and foreign market volatility that can impact performance.
Furthermore, the Aditya Birla Sun Life International Equity Fund carries an expense ratio of 0.06%, which is relatively low, making it a cost-effective option for those looking to diversify internationally.
During the period from October 2024 to February 2025, the Indian stock market underwent a significant downturn, with partial recovery seen in March. The Aditya Birla Sun Life International Equity Fund, however, managed to maintain positive returns, reflecting its strategic positioning and portfolio resilience. The fund’s net asset value as of April 2025 stands at Rs 36.97, a testament to its robust management and prudent investment strategies across diverse sectors such as financials, technology, and consumer discretionary.
SIP investment
Total investment: Rs 12 Lakh (Rs 10,000 SIP per month)
Investment period: 10 years
Profit: Rs 8.66 lakh
Total corpus: Rs 20.66 lakh
Absolute return: 72.19%
Nippon India US Equity Opportunities Fund
The Nippon India US Equity Opportunities Fund, launched in July 2015, operates primarily within the international equity category, focusing on foreign companies listed outside India. Despite being unrated in its category, the fund has seen its Net Asset Value (NAV) evolve from Rs 10.51 in its inception year to Rs 32.89 by April 2025, illustrating significant growth over the past decade. This growth trajectory indicates a strong potential for capital appreciation for long-term investors, notwithstanding the recent dip in performance, where NAV decreased slightly to Rs 32.89 in 2025 from Rs 33.93 in 2024.
Over the years, the fund has delivered varying returns, with notable annual performances such as a 31.82% return in 2019 and a 22.40% return in 2020. However, 2022 marked a concerning year with a -19.01% return, attributed to broader market volatilities. Nevertheless, it bounced back with a robust 32.38% return in 2023. The fund’s recent performance highlights the importance of a long-term view, as fluctuations are expected in international equity investments.
The fund’s strategy involves diversified investments in sectors like technology, consumer discretionary, and healthcare, with technology alone comprising 43.68% of its assets. Key holdings include prominent companies such as Meta Platforms, Amazon, and Alphabet Inc. The fund’s exposure to technology indicates a strategic selection of high-growth potential sectors, aligning with global digitalisation trends. While the fund remains unrated, its portfolio characteristics suggest a focus on high market capitalisation stocks, enhancing stability while pursuing growth.
SIP investment
Total investment: Rs 8.4 lakh (Rs 10,000 SIP per month)
Investment time: 7 years
Profit: Rs 5.72 lakh
Total corpus: Rs 14.12 lakh
Absolute return: 68.11%
Motilal Oswal Launches Business Cycle Fund
Launched in August 2024, Motilal Oswal Launches Business Cycle Fund has an NAV of Rs 11.39 and assets of Rs 1,603 crore. The fund, however, receives cautionary advice due to its narrow focus.
This fund is designed to capitalise on different phases of business cycles by investing primarily in companies that align with its specific investment objectives.
The Motilal Oswal Business Cycle Fund has been structured to focus heavily on equities, with an asset allocation of 86.78% in equities and 13.22% in cash and cash equivalents. This thematic fund’s top holdings include well-known companies such as Shaily Engineering Plastics and Coforge, indicative of its strategy to invest in sectors expected to benefit from cyclical economic changes.
SIP investment
Total investment: Rs 60,000
Six-month returns: 2.62%
Assets under management: Rs 1,603 crore
What should you do now?
For investors considering these options, it is essential to evaluate personal risk tolerance, investment horizon, and market conditions. While international funds have shown relative strength amid the Indian market’s recent struggles, factors such as currency risk and foreign market volatility must be considered. Similarly, thematic funds may appeal to those with a higher risk appetite and interest in specific sectors but require strategic timing to mitigate potential losses.