According to Crisil Intelligence, the number of mutual fund investor accounts went from 98 million at the end of March 2021 to 235 million at the end of March 2025. (Pixabay)
The end of the year is a good time to look back at how different investments performed throughout the year. In India, people are increasingly investing in the stock markets, not just to shield themselves from inflation eating away their money’s worth but also as a way to become wealthy or, at the very least, create a corpus for retirement.
In the past few years, especially since the start of 2021, the stock markets have given an excellent return on investments. This encouraged Indians to dutifully adopt Systematic Investment Plans (SIPs) and invest in mutual funds.
However, 2025 by itself has been a rather underwhelming year for equity investors. An important reason was US President Donald Trump’s tariffs, which upended the global trading order and, with it, the fortunes of many companies globally. Of course, there are many other reasons at play, too, but here’s a check on which investments paid off in 2025.
The CHART alongside maps the returns (in percentage) of a group of indices between December 2024 and December 19, 2025 — as close to a full year as possible. The indices provide a good sense of which category of companies were a good bet in 2025.
Index returns for 2025.
The Indian stock market is most often categorised by market capitalisation, which is nothing but the share price multiplied by the number of total outstanding shares of a company. The market cap, as it is often called, provides a sense of the size of a company. As with economies, larger companies tend to grow slower in percentage terms, and thus provide more modest returns, while smaller companies can grow at a fast clip and provide higher returns (in percentage terms).
But as the data shows, in 2025 it paid to invest in the bigger companies.
The Nifty 50, which is an index of the top 50 companies by market cap, grew by 10.1%. But as one moved down the order and considered smaller companies, the index returns became more moderate progressively. As such, the Nifty 100, which maps the top 100 companies returned only 8.3% while Nifty 200 just 7.9% and Nifty 500 collectively returned only 6.1%
What if you invested only in the mid-cap companies? This is a bunch of 150 companies ranked from 101 to 250 on the scale of market capitalisation. The returns were even lower, at 5.2%.
The worst fate, however, was reserved for those who invested only in small-caps. The Nifty Smallcap 250 index, which is a collection of companies ranked 251 to 500 in the market cap scale, gave negative returns. In other words, the index value at the end of December 19 this year is more than 7% less than what it was on December 20 last year.