Why did SBI Large Cap Fund trail its benchmark in 2025?

Summary: SBI Large Cap Fund’s underperformance in 2025 looks worrying only at first glance. However, the real question isn’t ‘why it lagged’, but whether it behaved the way you expected a large-cap fund to. When a large-cap fund trails its benchmark, the instinctive reaction is to ask, “What went wrong?” In reality, underperformance is rarely that simple. SBI Large Cap Fund lagging its benchmark in 2025 is not a mystery or an anomaly. It is usually the combined outcome of three things: what the fund chose to own more of, what it consciously owned less of and the small but persistent structural frictions that an index does not face. The first step is to set the right context. On Value Research Online, the benchmark for the SBI Large Cap Fund direct plan is the BSE 100 TRI. The fund’s one-year return is shown as 11.68 per cent, assets under management (AUM) stand at Rs 55,637 crore (as of November 30, 2025) and the expense ratio is 0.79 per cent (as of December 31, 2025). Those numbers don’t answer whether the fund is ‘good’ or ‘bad’. They point you to the right line of inquiry: How did the fund behave relative to a broad large-cap index and why did that behaviour produce a gap? That is what makes this a useful case study for investors in SBI Mutual Fund. Instead of stopping at “Why did it underperform?”, the more useful question is, “Which active choices explain the gap, and do those choices match what I expect from a lar