Mutual funds continue to be a powerful investment tool for wealth creation, especially for long-term investors. In 2025, several funds have delivered stellar returns over the last five years, outperforming benchmarks and offering robust gains across various categories. If you’re seeking top-performing mutual funds in India based on long-term returns, here’s your definitive guide.
🥇 Best Performing Mutual Funds in India (2025)
Below is a categorized list of mutual funds that have delivered outstanding 5-year returns as of 2025. These include equity (small-cap), hybrid, sector-specific, and debt funds.
📈 Equity Funds (Small-Cap Category)
| Fund Name | 5-Year Return | Expense Ratio | AUM (₹ Cr) |
|---|---|---|---|
| Quant Small Cap Fund (Direct) | 42.6% | 0.69% | ₹24,693 Cr |
| Bandhan Small Cap Fund | 34.3% | 0.50% | ₹9,316 Cr |
| Nippon India Small Cap Fund | 31.9% | 0.73% | ₹55,491 Cr |
These funds have significantly outperformed the market, thanks to their strategic allocation in high-growth small-cap stocks.
🔄 Hybrid Funds
| Fund Name | 5-Year Return | Expense Ratio | AUM (₹ Cr) |
|---|---|---|---|
| JM Aggressive Hybrid Fund | 27.0% | 2.29% | ₹768 Cr |
| ICICI Prudential Equity & Debt Fund (Direct) | 26.3% | 1.00% | ₹40,962 Cr |
| Quant Absolute Fund (Direct) | 25.81% | 0.70% | ₹2,000 Cr |
| UTI Aggressive Hybrid Fund | 22.9% | 1.88% | ₹5,910 Cr |
Hybrid funds offer a balanced approach, ideal for investors looking for moderate risk and steady growth.
🏗️ Sector-Specific Funds
| Fund Name | 5-Year Return | Expense Ratio | AUM (₹ Cr) |
|---|---|---|---|
| Quant Infrastructure Fund | 41.1% | 0.75% | ₹3,158 Cr |
| ICICI Pru Commodities Fund | 39.1% | 1.22% | ₹2,615 Cr |
| ICICI Pru Infrastructure Fund | 38.3% | 1.17% | ₹7,214 Cr |
| Bandhan Infrastructure Fund | 37.0% | 0.88% | ₹1,563 Cr |
With India’s push on infrastructure and commodity growth, these funds have seen explosive gains.
💼 Debt Funds
| Fund Name | 5-Year Return | Expense Ratio | AUM (₹ Cr) |
|---|---|---|---|
| Bank of India Credit Risk Fund | 27.4% | 0.08% | ₹110 Cr |
| DSP Credit Risk Fund (Direct) | 12.2% | 0.40% | ₹207 Cr |
Low-risk investors have benefited from steady returns with these credit risk debt funds.
✅ Key Takeaways
- Quant Mutual Fund schemes dominate the high-return space across categories.
- Small-cap equity funds delivered the highest overall gains, but come with higher volatility.
- Sector funds, especially infrastructure and commodities, surged due to macroeconomic trends.
- Expense ratios matter — lower costs generally mean better long-term compounding.
- Always consider AUM and risk profile before investing.
🧠 Final Thoughts
Choosing the best mutual fund depends on your financial goals, risk appetite, and investment horizon. While the above list provides high-performing options based on historical returns, past performance is not a guarantee of future results. Make sure to diversify and consult a certified financial advisor before making investment decisions.