Recent data shows 49% of actively managed equity schemes from new Indian fund houses have outperformed their benchmarks since launch. Success varies significantly, with funds focusing on domestic manufacturing and infrastructure showing better results compared to those heavily invested in IT and large private banks.
The Indian mutual fund sector has expanded rapidly with 14 new asset management companies entering the market since June 2021. Recent analysis of their performance reveals a split outcome for investors. Out of 39 eligible actively managed equity schemes, 19 have managed to outperform their benchmarks since inception. This 49% success rate highlights that while some new players are building strong early track records, others are still navigating the complexities of establishing consistent investment strategies.
Performance Trends Among New Entrants
Performance varies widely across these new entities, partly due to the short time most schemes have been in existence. Most funds have less than three years of history, making it difficult to determine whether returns are driven by long-term investment skill or short-term market conditions. Among the newer houses, Bajaj Finserv Mutual Fund has shown a high success rate, with eight out of nine eligible schemes beating their benchmarks. Helios Mutual Fund also reported that four out of its five schemes outperformed. Other firms like Abakkus Mutual Fund, Old Bridge Mutual Fund, and Unifi Mutual Fund have seen their initial schemes outperform, though these remain at a smaller scale of operations.
Conversely, some firms have faced challenges in matching benchmark returns. Samco Mutual Fund saw seven out of its eight schemes underperform, while similar struggles were noted at NJ Mutual Fund, Jio BlackRock Mutual Fund, and The Wealth Company Mutual Fund. A notable difference in strategy is evident in portfolio turnover, which measures how frequently a fund manager buys and sells stocks. Samco Mutual Fund recorded a turnover rate of 1,022% for its equity schemes, whereas Helios Mutual Fund maintained a much lower turnover of 33%. High turnover can sometimes indicate frequent changes in strategy, which investors should track for consistency.
Sector Bets and Market Positioning
Portfolio positioning played a major role in the varying returns. Funds that outperformed generally reduced their exposure to IT services and large private-sector banks, shifting instead toward domestic manufacturing, infrastructure, and capital goods. Specific sectors like electrical equipment, engineering, power generation, and auto ancillaries were favored by the stronger-performing funds. In contrast, many underperforming funds maintained a higher concentration in large private-sector banks and IT stocks, which lagged behind during the period.
As of June 30, these 14 new asset management companies managed ₹1.03 lakh crore in assets, which accounts for approximately 1.2% of the total ₹83 lakh crore industry size. Asset accumulation has been stronger for firms backed by established brands or wide-reaching digital platforms, such as Bajaj Finserv Mutual Fund, Jio BlackRock Mutual Fund, and Zerodha Mutual Fund. Investors looking at these newer fund houses may want to monitor whether the performance of these schemes remains stable as they grow in size and how their investment processes evolve over a full market cycle.