Commodity-based mutual funds steal the spotlight in 2025:MF, ETF, FoF schemes with high gold and silver exposure outperform equity funds

As the year draws to a close, a review of the best-performing mutual fund schemes over the past one year shows that while Indian equity benchmarks, Sensex and Nifty, posted year-to-date gains of around 9%, commodity-linked investments generated much higher returns. Mutual funds across asset classes recorded positive performance, but it was precious metals that dominated the return charts. Experts point out that commodity-based investment products outpaced even top-performing equity mutual funds during the year. Silver ETFs and FoFs lead the performance charts Silver-focused ETFs and FoFs, both are types of mutual fund schemes, in particular, stood out as star performers. Schemes such as Aditya Birla Sun Life Silver ETF FoF, ICICI Prudential Silver ETF FoF and Nippon India Silver ETF FoF delivered returns of over 130% in the last one year, driven by a sharp rally in silver prices. According to Navy Vijay Ramavat, Managing Director at Indira Securities, precious metals dominated the mutual fund performance charts this year. He noted that silver-linked funds delivered exceptional returns, with overseas funds investing in global gold mining companies also benefitting from the rally in bullion prices. “The strong performance was driven by the sustained rise in gold and silver prices, which played out across both global and Indian markets,” Ramavat said, adding that multi-asset funds with exposure to commodities and large-cap equities gained from balanced asset allocation. However, he cautioned investors against treating short-term commodity rallies as long-term trends. He emphasised that commodities are cyclical in nature and can go through extended periods of correction after sharp upswings. Factors such as asset allocation, risk appetite, time horizon and fund size should take precedence over recent returns when selecting schemes. Highest Performing Funds In 2025: Source: AMFI Equity funds deliver selective gains amid volatility Equity-oriented funds also had their share of winners, particularly sectoral and large-cap-focused strategies. Manish Talwar, Founder of Goalstox, pointed out that BFSI-focused mutual funds were among the top performers in 2025, with several schemes delivering over 20% returns in the past year. Funds such as Quant BFSI, DSP BFSI and SBI BFSI benefitted from the relative strength of banking and financial services stocks compared to the broader market. Talwar added that within diversified equity funds, large-cap and flexi-cap schemes outperformed mid- and small-cap peers, as investors gravitated towards stability amid market volatility. Focused funds and hybrid strategies also did well, with aggressive hybrid and balanced funds delivering better risk-adjusted returns than many pure equity schemes. “Hybrid funds helped investors manage volatility while still participating in equity upside,” he said, underlining the role of asset allocation and periodic rebalancing. Experts stress diversification and disciplined investing From a longer-term perspective, consistency and discipline remained key themes. Vishranth Suresh, CEO and Co-founder of AssetPlus, said that 2025 reinforced the idea that sustained performance across cycles matters more than one-year spikes. He highlighted steady performers across large-cap, flexi-cap, value and even select small-cap categories, while noting that large-cap funds benefitted from stable earnings and stronger balance sheets. Suresh also acknowledged the exceptional one-year returns delivered by commodities, pointing out that silver and gold posted sharp gains as investors sought safe-haven assets amid global uncertainty. “Such rallies highlight both the opportunity and the volatility in commodities, making timing and allocation crucial,” he said. Conclusion Overall, 2025 underscored the importance of spreading investments across asset classes. Commodity-based mutual funds, ETFs and FoFs not only enhanced portfolio returns over the past year but also reaffirmed their relevance as a strategic allocation during uncertain market conditions. ​