Indian Market Surges! 3 Top Funds Beat Benchmarks with Stellar SIP Returns – Your Investment Guide!

Indian benchmark indices have been on an upward trajectory, reaching new heights driven by robust corporate earnings, a revival in private capital expenditure, and strong domestic investment flows. Mutual fund Systematic Investment Plan (SIP) contributions are consistently setting new monthly records, reflecting a growing confidence among Indian households in long-term equity investing.

While large-cap stocks have shown resilience due to substantial institutional support and clear earnings visibility, mid and small-cap segments have experienced sharp rallies followed by significant corrections. This market behavior has underscored the importance of valuation discipline for investors, even amidst abundant growth opportunities.

In this context, the Large & Mid Cap mutual fund category emerges as a relevant investment avenue, offering a blend of investments in India's growth story with a cushion against extreme market volatility. The article highlights three funds that stand out for their sustained historical performance, disciplined portfolio construction, and strong risk-adjusted returns:

1. **Motilal Oswal Large & Midcap Fund:** This growth-focused scheme aims to capture India's opportunity with a 'buy-right, sit-tight' philosophy. It focuses on high-quality companies with competitive moats, healthy balance sheets, and strong cash flows. The fund balances large-cap stability with mid-cap growth, typically holding around 37 stocks, with a significant allocation to mid-caps. Over 5 years, it delivered an XIRR of 26.33% against its benchmark's 18.17%.

2. **Invesco India Large & Mid Cap Fund:** Adopting a growth-oriented approach, this fund seeks companies with sustainable competitive strengths and earnings visibility. It blends large-cap resilience with mid-cap agility, employing a bottom-up research strategy focused on business quality and corporate governance. As of October 2025, it held 45 stocks, with about 42.8% in mid-caps. Its 5-year XIRR was 23.67% compared to the benchmark's 18.17%.

3. **Bandhan Large & Mid Cap Fund:** This fund follows a 'growth-with-quality' philosophy, identifying businesses with robust fundamentals and consistent earnings visibility. It avoids momentum-led themes, focusing on companies that compound value over longer cycles. The portfolio is a mix of dominant large caps and select mid-caps. It holds approximately 120 stocks, with about 36.7% in mid-caps. Its 5-year XIRR stood at 23.34% against the benchmark's 18.17%.

**Impact:** This news is highly relevant for Indian investors as it guides them on navigating market volatility by choosing suitable mutual fund categories and specific funds. It influences investment decisions, potentially directing capital flows towards these fund categories, which can indirectly impact the stock prices of the underlying companies. The focus on SIPs reinforces a long-term investment culture. The overall impact on the Indian stock market is positive, encouraging sustained investment and potentially stabilizing market sentiment. Rating: 8/10.

**Definitions:** * **XIRR (Extended Internal Rate of Return):** An annualized return metric that calculates the rate of return for a series of cash flows occurring at irregular intervals, often used for evaluating the performance of investments like SIPs over specific periods. * **SIP (Systematic Investment Plan):** A disciplined method of investing a fixed amount of money into mutual funds at regular intervals (e.g., monthly), helping to average out the purchase cost over time. * **TRI (Total Returns Index):** A stock market index that assumes all dividends are reinvested back into the index, providing a more comprehensive measure of investment performance than a price return index. * **Economic Moat:** A sustainable competitive advantage that allows a company to maintain profitability and market share over the long term, protecting it from competitors. Examples include strong brand recognition, patents, or network effects.