FPIS NET BUY EQUITY; BUT NET SELL DEBT IN JUNE 2025
For June 2025, FPIs were net sellers overall to the tune of ₹(7,563) Crore in Indian markets. This included ₹14,590 Crore of buying in equities; offset by ₹(22,153) Crore of selling in debt. The equity net buying had a strong IPO contribution. Ironically, debt selling was visible as the yield spreads started to narrow after the RBI cut rates by 50 bps. In June 2025, Sensex rallied +2.65%, Nifty 50 rallied by +3.10%, Nifty Mid-Cap surged +4.04%, and Nifty Small Cap closed +6.66% higher. In fact, the small cap index has rallied over 16% in last two months; a clear signal of retail risk-on returning to markets. The sharp rate cut and the CRR cut is likely to make equities more attractive in terms of valuations.
BENCHMARK BOND YIELDS EDGE UP IN JUNE 2025
The bond markets had already factored in a 50 bps rate cut and the 10-year benchmark yields fell to 6.18% after the policy statement. However, with the RBI policy changing its stance from accommodative to neutral, there was bottoming out of yields as the signals ruled out further rate cuts for now. Also, surplus liquidity would keep yields at the short end subdued. Towards the end of June, the current account deficit came in much lower than expected at 0.6% of GDP, which is positive for the INR. The rally in bond yields to 6.32% at close was more due to price fall as there was heavy selling of bonds by FPIs in June 2025.
- Equity Large-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Nippon India Large Cap Fund (G) | 7.803% | 26.288% | 28.023% |
| ICICI Pru Bluechip Fund (G) | 8.471% | 23.393% | 24.751% |
| HDFC Large Cap Fund (G) | 4.946% | 21.828% | 24.128% |
| Category Average | 5.629% | 20.474% | 21.333% |
| Data Source: Morningstar | |||
- Equity Multi-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Nippon India Multi Cap (G) | 6.777% | 30.905% | 34.021% |
| Quant Active Fund (G) | -7.977% | 21.349% | 30.507% |
| Mahindra Manulife Multi Cap (G) | 6.847% | 27.938% | 30.110% |
| Category Average | 6.484% | 25.453% | 27.691% |
| Data Source: Morningstar | |||
- Equity Flexi-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Flexi Cap Fund (G) | -4.932% | 25.652% | 33.575% |
| HDFC Flexi Cap Fund (G) | 11.561% | 28.587% | 31.039% |
| BOI Flexi Cap Fund (G) | 0.693% | 28.962% | 30.446% |
| Category Average | 5.301% | 22.345% | 23.566% |
| Data Source: Morningstar | |||
- Equity Mid-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Motilal Oswal Mid-Cap Fund (G) | 10.611% | 36.785% | 38.447% |
| Edelweiss Mid-Cap Fund (G) | 13.290% | 34.120% | 35.872% |
| Nippon India Growth Fund (G) | 10.161% | 32.832% | 34.652% |
| Category Average | 6.204% | 28.149% | 30.066% |
| Data Source: Morningstar | |||
- Equity Small-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Small Cap Fund (G) | -0.986% | 33.097% | 46.742% |
| Nippon Small Cap Fund (G) | 2.931% | 31.562% | 39.313% |
| Bandhan Small Cap Fund (G) | 16.326% | 37.255% | 38.615% |
| Category Average | 4.948% | 27.394% | 34.605% |
| Data Source: Morningstar | |||
- Balanced Funds (Aggressive Allocation)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| BOI Equity and Debt Fund (G) | 4.701% | 26.151% | 29.168% |
| JM Aggressive Hybrid Fund (G) | 2.051% | 26.839% | 28.766% |
| Quant Aggressive Hybrid (G) | 1.170% | 19.264% | 27.831% |
| Category Average | 7.170% | 19.302% | 20.446% |
| Data Source: Morningstar | |||
- Dynamic Asset Allocation Funds (BAF)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| HDFC BAF (G) | 6.915% | 24.150% | 25.990% |
| Baroda BNP Paribas BAF (G) | 10.032% | 19.923% | 18.751% |
| Edelweiss BAF (G) | 6.613% | 16.584% | 17.416% |
| Category Average | 6.386% | 15.463% | 14.605% |
| Data Source: Morningstar | |||
- Multi-Asset Allocation Funds (MAAF)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Quant Multi-Asset Fund (G) | 8.584% | 26.281% | 33.538% |
| ICICI Pru Multi-Asset Fund (G) | 12.857% | 23.025% | 25.489% |
| Tata Multi-Asset Fund (G) | 7.969% | 18.990% | 20.176% |
| Category Average | 8.570% | 18.538% | 20.617% |
| Data Source: Morningstar | |||
- Arbitrage Funds (Cash-Futures)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Invesco India Arbitrage Fund (G) | 7.710% | 7.747% | 6.365% |
| Kotak Arbitrage Fund (G) | 7.762% | 7.677% | 6.342% |
| Edelweiss Arbitrage Fund (G) | 7.756% | 7.611% | 6.302% |
| Category Average | 7.126% | 6.976% | 5.645% |
| Data Source: Morningstar | |||
- Government Securities Funds (Gilt Funds)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| ICICI Prudential Gilt Fund (G) | 10.204% | 9.437% | 7.058% |
| Edelweiss G-Sec Fund (G) | 8.283% | 8.376% | 6.882% |
| SBI Magnum Gilt Fund (G) | 8.561% | 8.651% | 6.671% |
| Category Average | 8.094% | 7.940% | 6.468% |
| Data Source: Morningstar | |||
- Corporate Bond Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| Nippon Corporate Bond (G) | 10.177% | 8.529% | 7.343% |
| Axis Corporate Debt Fund (G) | 10.266% | 8.441% | 7.133% |
| Franklin India Corporate Bond (G) | 11.001% | 8.276% | 6.959% |
| Category Average | 9.535% | 7.842% | 6.305% |
| Data Source: Morningstar | |||
- Credit Risk Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Jun-25):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
| BOI Credit Risk Fund (G) | 6.240% | 6.170% | 27.192% |
| DSP Credit Risk Fund (G) | 23.940% | 15.703% | 12.405% |
| Baroda BNP Credit Risk Fund (G) | 10.013% | 8.842% | 11.049% |
| Category Average | 11.557% | 9.074% | 9.728% |
| Data Source: Morningstar | |||
Having seen returns for various categories of funds for June 2025, some key takeaways.
WHAT WE READ FROM THE JUNE 2025 MUTUAL FUND RANKINGS
Here are some key trends we deciphered from the MF rankings for June 2025.
- In June 2025, while equity funds showed better 1-year returns, debt funds saw lower returns on higher bond yields. Five-year returns are still pandemic influenced.
- The leaders in almost all the categories have done better than the benchmark indices, which shows clear alpha generation by the category leaders.
- Above all, winners across categories (debt, equity, and hybrid) have been consistent with over 90% repetitions. Past returns appear to be a good index of the future!