# How large AUM affects mutual fund returns analysed 2026-08-22T04:17:27+00:00 | Business & Economy | Indian Opinion Desk Corroboration: 1 independent outlet India's mutual fund industry assets under management (AUM) have more than doubled to Rs 85 lakh crore in five years, raising concerns among investors about whether large scheme size impacts returns. A Livemint analysis of the four largest schemes in their respective categories shows mixed results across different time periods. The ICICI Prudential Large Cap Fund (AUM Rs 80,960 crore) underperformed its category and BSE 100 TRI in the last year but outperformed over 3, 5, and 10 years. The HDFC Mid Cap Fund (AUM Rs 1,05,143 crore) lagged its category in the last year but beat benchmarks over longer periods. The Nippon India Small Cap Fund (AUM Rs 78,957 crore) outperformed its benchmark but trailed its category recently, leading to subscription restrictions since July 2023. The Parag Parikh Flexi Cap Fund (AUM Rs 1,48,429 crore) delivered negative returns in the last year but outperformed over longer horizons. The analysis indicates that while some large schemes have seen short-term underperformance, most have delivered consistent returns over 3 to 10 years, suggesting AUM size alone does not determine returns. ## Indian Opinion Analysis The key question for investors is whether a fund's AUM has crossed its 'capacity constraint', the point where the fund manager can no longer deploy fresh money into enough quality stocks without distorting prices. This varies by category: large-cap funds can handle larger AUMs because of higher liquidity in top stocks, while small-cap funds face sharper constraints. The Nippon India Small Cap Fund's move to cap SIPs at Rs 50,000 per day per PAN shows the fund house itself acknowledged the capacity issue. Investors should watch not just past returns but also the fund's expense ratio and portfolio turnover, which tend to rise with size. The next regulatory move from SEBI on portfolio concentration norms could further clarify the issue. ## Coverage - livemint.com Presents performance data without editorialising, letting tables speak. No government angle. This story was synthesised by AI from the source linked above. Tags: HDFC Mutual Fund, ICICI Prudential, Mutual Funds Sahi Hai, Nippon India, Parag Parikh, SEBI Canonical: https://indianopinion.org/how-large-aum-affects-mutual-fund-returns-analysed/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/how-large-aum-affects-mutual-fund-returns-analysed/#story-in-brief How this brief was made: an AI model read the report linked above and wrote this summary and analysis, which were published automatically. Published briefs are sampled every hour by an automated quality check; the editor verifies its findings and approves corrections, and corrected briefs carry a dated correction line. We do no original reporting. Methodology: https://indianopinion.org/ai-use-policy/