Interested in investing? Mutual funds continue to be a preferred investment choice for Indian investors, backed by strong and consistent SIP inflows. According to the Association of Mutual Funds in India (AMFI), monthly SIP collections touched ₹29,445 crore in November 2025, reflecting growing retail participation and long-term investing discipline. Against this backdrop, this article looks at the top-performing mutual funds in India over the last five years, helping investors understand which funds have delivered consistent returns across market cycles.
Here’s a snapshot of some of the top-performing equity mutual funds in India over the past five years, based on long-term annualised returns and including small-cap and sector-focused schemes that have delivered strong performance. This list helps investors compare returns from different fund strategies.
| Fund Name | Category | 5-Year Return (Annualised) |
|---|---|---|
| Quant Small Cap Fund | Small Cap | 33.57% – 50.18% |
| ICICI Prudential Infrastructure Fund | Thematic / Sectoral | 38.55% – 44.20% |
| Nippon India Small Cap Fund | Small Cap | 33.68% – 38.93% |
| Motilal Oswal Midcap Fund | Mid Cap | 35.13% |
| Bandhan Small Cap Fund | Small Cap | 32.88% |
| SBI Contra Fund | Contra | 29.17% |
| HDFC Mid Cap Opportunities Fund | Mid Cap | 29.57% |
| Quant ELSS Tax Saver Fund | ELSS (Tax Saver) | 39.18% |
| HDFC Flexi Cap Fund | Flexi Cap | 28.15% |
Small-cap and Mid-cap funds have historically outperformed during bullish cycles but carry much higher volatility and potential for "drawdowns" (temporary losses).
Funds like HDFC Flexi Cap and SBI Contra are often highlighted for their ability to manage large assets while still delivering high double-digit returns.
The returns mentioned above typically refer to Direct Plans, which have lower expense ratios and thus slightly higher returns than Regular Plans.
The table below highlights some of the top-performing debt mutual funds in India over the last five years, based on annualised returns. These funds span categories such as medium duration, credit risk, dynamic bond, and corporate bond funds.
| Fund Name | Category | 5-Year Return (Annualised) |
|---|---|---|
| Aditya Birla Sun Life Medium Term Plan | Medium Duration | 12.62% |
| DSP Credit Risk Fund | Credit Risk | 12.00% |
| SBI Medium Duration Fund | Medium Duration | 8.24% |
| Baroda BNP Paribas Credit Risk Fund | Credit Risk | 10.26% |
| Aditya Birla Sun Life Credit Risk Fund | Credit Risk | 10.08% |
| Nippon India Medium Duration Fund | Medium Duration | 9.43% |
| UTI Dynamic Bond Fund | Dynamic Bond | 9.14% |
| HDFC Short Term Debt Fund | Short Duration | 7.95% |
| ICICI Prudential Corporate Bond Fund | Corporate Bond | 7.42% |
The highest returns in the debt category often come from Credit Risk Funds. These funds invest in lower-rated corporate bonds to earn higher interest, which carries a higher risk of default compared to Gilt or Corporate Bond funds.
Longer-duration funds (like Medium Term or Gilt funds) are sensitive to interest rate changes in the economy. When market interest rates fall, these funds often see a spike in returns, and vice versa.
Note that from April 2023, capital gains from debt mutual funds are taxed at your applicable income tax slab rate, regardless of the holding period, removing the previous "indexation" benefit.
The following table highlights some of the best-performing hybrid mutual funds in India, spanning categories such as Multi-Asset Allocation, Aggressive Hybrid, Balanced Advantage, and Solution-Oriented funds, based on their 5-year annualised returns (CAGR) as of late 2025.
| Fund Name | Category | 5-Year Return (Annualised) |
|---|---|---|
| SBI Magnum Children’s Benefit Fund | Solution Oriented / Hybrid | 32.8% – 34.3% |
| Quant Multi Asset Fund | Multi Asset Allocation | 27.47% |
| ICICI Prudential Equity & Debt Fund | Aggressive Hybrid | 22.3% – 25.4% |
| Bank of India Mid & Small Cap Equity & Debt Fund | Aggressive Hybrid | 21.2% – 23.3% |
| JM Aggressive Hybrid Fund | Aggressive Hybrid | 18.6% – 23.8% |
| Quant Absolute Fund | Aggressive Hybrid | 23.29% |
| ICICI Prudential Multi-Asset Fund | Multi Asset Allocation | 22.6% |
| HDFC Balanced Advantage Fund | Balanced Advantage | 20.3% |
| Kotak Aggressive Hybrid Fund | Aggressive Hybrid | 20.5% |
Hybrid funds are not "one size fits all." The risk profile changes significantly depending on the specific type:
Invests 65–80% in equity. It acts like an equity fund but with a debt "cushion" to lower volatility.
Invests in at least three asset classes (usually Equity, Debt, and Gold). This provides the highest level of diversification.
These are dynamic. They move money between equity and debt automatically based on whether the market is expensive or cheap.
The safest hybrid category, which exploits price differences in the cash and derivatives market (returns are usually similar to liquid debt funds).
Here are the performance metrics of the best mutual funds in India in the last 5 years:
5-Year CAGR: 33.57% – 50.18%
AUM: ₹22,000+ crore
Minimum SIP Amount: ₹1,000
Expense Ratio: ~0.7% – 0.8%
Category: Small Cap
Key Holdings: Industrial and capital goods leaders, select emerging small-cap companies
5-Year CAGR: 33.68% – 38.93%
AUM: ₹65,900+ crore
Minimum SIP Amount: ₹100
Expense Ratio: ~0.6% – 0.7%
Category: Small Cap
Key Holdings: Manufacturing, chemicals, engineering, and consumer-focused small-cap stocks
5-Year CAGR: ~35.13%
AUM: ₹37,500+ crore
Minimum SIP Amount: ₹500
Expense Ratio: ~0.7% – 0.8%
Category: Mid Cap
Key Holdings: Focused portfolio of quality mid-cap companies in technology and industrial sectors
5-Year CAGR: 38.55% – 44.20%
AUM: ₹6,800+ crore
Minimum SIP Amount: ₹1,000
Expense Ratio: ~0.9% – 1.0%
Category: Thematic / Infrastructure
Key Holdings: Larsen & Toubro, Reliance Industries, NTPC, and other infrastructure-linked companies
5-Year CAGR: ~39.18%
AUM: ₹9,480+ crore
Minimum SIP Amount: ₹500
Expense Ratio: ~0.7% – 0.8%
Category: ELSS (Tax Saver)
Lock-in Period: 3 years
Key Holdings: Diversified equity exposure across large-, mid-, and select small-cap stocks
Mutual fund performance over the past few years has been shaped by a mix of market cycles, investor behaviour, and policy-driven changes. Understanding these trends helps investors better interpret returns and manage expectations.
Rising retail participation through SIPs has provided steady inflows, supporting long-term fund performance.
Market volatility has favoured actively managed funds that can rebalance portfolios quickly.
Strong performance of mid- and small-cap stocks has boosted returns for the growth-oriented funds.
Interest rate movements have influenced debt fund returns and asset allocation strategi.es
Sector-specific themes such as infrastructure, manufacturing, and consumption have driven thematic fund performance.
Increased focus on diversification through hybrid and multi-asset funds has helped manage risk across market cycles.
Mutual funds that have performed well over the last five years offer valuable insights into consistency, risk management, and growth potential across market cycles.
Demonstrated ability to deliver returns through both market highs and corrections
Better portfolio diversification due to exposure across sectors and market capitalisations
Professional fund management backed by proven investment strategies
Potential for long-term wealth creation through compounding
Higher investor confidence is reflected in sustained inflows and growing AUM.
Availability of different categories such as equity, hybrid, and tax-saving funds, ds to suit varied financial goals.
Past performance alone should not be the sole basis for investment decisions, as market conditions and individual risk profiles vary.
Equity and hybrid funds can experience short-term fluctuations, especially during economic slowdowns or global events.
High-return funds often carry higher risk, which may not suit conservative or short-term investors.
Small-cap, sectoral, and thematic funds tend to be more volatile than large-cap or diversified funds.
Higher expense ratios can gradually reduce net returns over long investment periods.
Any shift in investment approach or fund management can affect future performance.
Mutual funds generally perform best over longer periods; exiting too early can lead to suboptimal returns.
A healthy AUM often indicates investor confidence and operational stability, though extremely large AUMs may affect agility in certain fund categories.
Association of Mutual Funds in India (AMFI) – Industry data, SIP inflows, and mutual fund statistics
Fund house official websites and scheme fact sheets
Publicly available data.
The information provided in this article is for educational and informational purposes only and should not be considered financial or investment advice. Mutual fund investments are subject to market risks, and past performance is not indicative of future results. Investors are advised to carefully read all scheme-related documents and consult a qualified financial advisor before making any investment decisions.
Small-cap and sectoral funds have delivered some of the highest returns over the last five years, particularly funds that benefited from strong mid- and small-cap rallies. However, returns vary by market cycle and come with higher risk.
Yes, you can invest in these funds, but it’s important to check whether they still align with your goals, risk appetite, and investment horizon rather than relying only on past performance.
Past performance can indicate consistency, but it should not be the only deciding factor. Market conditions change, and high past returns do not guarantee similar future performance.
Debt funds such as short-duration, corporate bond, and dynamic bond funds are commonly preferred, depending on interest rate outlook and individual risk tolerance.
You can track performance through fund house websites, AMFI, and trusted financial platforms that provide NAV history, returns, and portfolio details.
Mutual funds offer diversification and professional management, which can reduce risk compared to investing in individual stocks, especially for long-term investors.
Key factors include your financial goals, time horizon, risk tolerance, fund category, expense ratio, and long-term performance consistency.
Yes, equity mutual funds are generally more volatile but offer higher long-term growth potential, while debt funds are relatively more stable with lower return expectations.
There is no single “best” fund for everyone. A suitable fund depends on your investment goals, risk appetite, and whether you prefer equity, hybrid, or debt exposure.
Beginners may prefer index funds for their simplicity and low cost, while actively managed funds can be considered if investors are comfortable with higher risk and manager-driven strategies.
