mutual fund investment
Amidst the uncertainty in the Indian stock market, people’s trust in mutual funds has increased. But do you know that about 50 percent of the investment in mutual funds is held by only 19 stocks. According to the data, so far in the calendar year 2025, 50% of the total equity investment has been invested in only 19 stocks, which include Eternal, Swiggy, SBI and Reliance Industries.
This year 2025, the total amount of Rs 2,67,500 crore deposited in mutual fund equity schemes is dominated by a few stocks. According to a recent analysis by Elara Securities, 25% of investments went into only six stocks, while 50% was accumulated in only 19 stocks. The top recipients of mutual fund investments include Infosys with 5% of the total investment, Axis Bank with 4%, Eternal Limited with 4%, State Bank of India with 4%, Swiggy Limited with 4% and Asian Paints with 3%. These six stocks alone have attracted mutual fund investments of about Rs 67,000 crore.
25% stake went into these shares
Apart from this, 25% investment has gone into 13 stocks, which include HDFC Bank, Vishal Mega Mart, RIL, HDB Financial Services, Dixon Tech, Kotak Mahindra Bank, Siemens Energy, TCS, Bajaj Finserv, Keynes Tech, Varun Beverages, Tata Steel and Hexaware Tech. This concentrated investment comes at a challenging time for the industry.
AUM-weighted 1-year rolling returns for Indian equity mutual funds have turned negative from August 2025, for the first time since 2018. The prevalence of fund returns has also reached a post-Covid low, and the percentage of schemes delivering positive 1-year returns across categories is falling rapidly. By September 2025, equity funds have been underperforming debt funds on a one-year rolling basis since February 2025 and the gap has increased to 10%. Which is the lowest equity premium since October 2020.
There was a decline in the last month
There has been a slight decline in active equity inflows in the last two months due to weak return profile. From Rs 43,350 crore in July 2025 to Rs 31,000 crore in September 2025, there is a 28% decline in inflows. The biggest recession has been in thematic, sectoral funds and smallcap sectors. While concentrated bets can enhance returns during bull markets, they also increase portfolio risk. Since mutual funds collectively hold a significant portion of certain stocks, any adverse change in these holdings can have a huge impact on the overall portfolio performance.
Of the 1,100 stocks in the mutual fund portfolio, only 55 stocks saw net sales of more than Rs 500 crore during the period. Meanwhile, investments worth Rs 8,000 crore remained in cash, suggesting that fund managers are becoming more cautious even while aggressively infusing capital in select companies.
cash crunch
Mutual fund schemes have seen a significant cash crunch in recent months, with total cash holdings falling from a peak of 6.8% in April 2025 to 5.4% in September 2025. This infusion has been particularly aggressive in midcap schemes, where cash levels declined from 7.3% by May 2025 to 4.5%, representing an infusion of nearly Rs 10,000 crore in just four months. The most notable investments came from fund houses like Motilal Oswal, ICICI Prudential and Mirae Asset, which have played a leading role in deploying idle cash.