Indian Legacy Funds Outperform Newer Rivals in Volatile Market
Older asset managers delivered 3.2% average returns in large- and mid-cap funds, against 0.8% for newer firms, a Mint analysis found.
Established Funds Lead Returns
India's established mutual fund houses generally outperformed newer competitors over the past year. A Mint analysis across six mutual fund categories revealed that older asset management companies (AMCs) delivered superior returns in four of them.
For instance, in the large- and mid-cap fund segment, legacy AMCs achieved an average return of 3.2% between September 2025 and September 2026. This contrasted with a 0.8% average return for fund houses launched within the last decade, according to data from investment research firm Value Research.
Performance Across Categories
The margin of outperformance varied by fund type. In multi-asset allocation funds, legacy AMCs posted an average return of 11.07%, exceeding the 8.7% recorded by newer players. Arbitrage funds also saw established houses return 6.6%, slightly above their newer counterparts' 6.4%. This divergence emerged as fund managers navigated a challenging period.
The Nifty 50 index, for example, dropped 8.4% since 28 February, hitting 22,331.4 on 30 March. Despite this, India’s mutual fund assets under management (AUM) expanded by 16% year-on-year to ₹87.08 trillion by August, the Association of Mutual Funds in India reported.
Advantages of Experience and Scale
Industry experts attribute the stronger performance of legacy AMCs to several factors. Sirshendu Basu, head of products at Bandhan AMC Ltd, noted that longer track records provide investors with more confidence during market instability, leading to stickier systematic investment plans (SIPs).
Swarup Mohanty, chief executive of Mirae Asset Investment Managers, highlighted that larger AUMs in debt funds can lead to lower redemptions and potentially higher yields.
Additionally, larger AMCs can commit more capital to initial public offerings (IPOs), potentially boosting net asset values if listings are strong, and negotiate better credit spreads on corporate bonds, as indicated by Jimmy Patel, managing director of Quantum Mutual Fund.
While legacy AMCs showed resilience, the outperformance may not signal a permanent structural advantage. Nilesh Shah, managing director at Kotak Mahindra AMC, suggested that market cycles often favour particular investment styles. In a “momentum market,” smaller AMCs can be more agile due to lower AUM.
Conversely, markets valuing quality and selectivity can benefit larger AUMs equally. For investors in India's growing mutual fund sector, this suggests that while a long track record offers reassurance, fund selection should consider current market dynamics and specific fund strategies, rather than solely relying on a fund house's age. The next shift in market sentiment could alter this performance trend.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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