Which Mutual Funds Are The Top Performers In Last 5 Years?

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.

Key Takeaways for Investors

• Risk vs. Reward

Small-cap and Mid-cap funds have historically outperformed during bullish cycles but carry much higher volatility and potential for "drawdowns" (temporary losses).

• Consistency

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.

• Direct vs. Regular

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.

Important Considerations for Debt Investors

• Credit Risk vs. Safety

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.

• Interest Rate Sensitivity

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.

• Taxation Change

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.

Understanding Hybrid Fund Types

Hybrid funds are not "one size fits all." The risk profile changes significantly depending on the specific type:

• Aggressive Hybrid

Invests 65–80% in equity. It acts like an equity fund but with a debt "cushion" to lower volatility.

• Multi-Asset Allocation

Invests in at least three asset classes (usually Equity, Debt, and Gold). This provides the highest level of diversification.

• Balanced Advantage (BAF)

These are dynamic. They move money between equity and debt automatically based on whether the market is expensive or cheap.

• Arbitrage Funds

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:

1. Quant Small Cap Fund – Direct Growth

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

2. Nippon India Small Cap Fund – Direct Growth

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

3. Motilal Oswal Midcap Fund – Direct Growth

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

4. ICICI Prudential Infrastructure Fund – Direct Growth

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. Quant ELSS Tax Saver Fund – Direct Growth

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.

1. Market volatility

Equity and hybrid funds can experience short-term fluctuations, especially during economic slowdowns or global events.

2. Risk–return alignment

High-return funds often carry higher risk, which may not suit conservative or short-term investors.

3. Fund category risk

Small-cap, sectoral, and thematic funds tend to be more volatile than large-cap or diversified funds.

4. Expense ratio impact

Higher expense ratios can gradually reduce net returns over long investment periods.

5. Fund manager and strategy changes

Any shift in investment approach or fund management can affect future performance.

6. Investment horizon

Mutual funds generally perform best over longer periods; exiting too early can lead to suboptimal returns.

7. Assets Under Management (AUM)

A healthy AUM often indicates investor confidence and operational stability, though extremely large AUMs may affect agility in certain fund categories.

Sources

• 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.

Disclaimer

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.