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GuidesMutual FundsA Guide: Best Mutual Funds in India in 2025 | Top Performing Mutual Funds in India
LAST EDITED BY ANKANA GHOSHAL ON MARCH 20, 2025.
Everyone's looking for the best Mutual Fund investments in 2025. During your explorations of Top Performing Mutual Funds, you may come across too many. We're here to help you make an informed decision of your own. Equity mutual funds are a good place to start.
Equity mutual funds seek to generate returns by investing in stocks of publicly listed companies across various market capitalisations. As per SEBI regulations, these funds must allocate at least 65% of their pooled capital to equities and equity-related securities, while the remaining 35% can be invested in debt or money-market instruments. The primary objective of these funds is to achieve positive returns over the long term.
Returns from equity mutual funds can fluctuate depending on the composition of the portfolio, market conditions, the duration of the investment, and the level of risk taken. The fund manager also plays a crucial role in shaping the portfolio by selecting appropriate assets.
Now, let's continue exploring some of the best-rated equity mutual funds in India.
| Scheme Name | Return 5 year (%) Direct | Daily AUM (Cr.) |
| Quant Small Cap Fund | 48.23 | 23,817.70 |
| Quant Infrastructure Fund | 41.72 | 3,038.91 |
| ICICI Prudential Commodities Fund | 40.26 | 2,542.97 |
| ICICI Prudential Infrastructure Fund | 37.29 | 7,015.25 |
| Quant ELSS Tax Saver Fund | 37.05 | 9,930.78 |
| Quant Flexi Cap Fund | 36.67 | 6,427.04 |
| Nippon India Small Cap Fund | 36.52 | 52,339.65 |
| Quant Mid Cap Fund | 36.11 | 7,921.36 |
| Bandhan Small Cap Fund | 35.45 | 8,777.94 |
| SBI Contra Fund | 35.04 | 40,233.67 |
| ICICI Prudential India Opportunities Fund | 34.87 | 24,008.14 |
| Bandhan Infrastructure Fund | 34.48 | 1,453.27 |
| Bank of India Small Cap Fund | 33.73 | 1,446.04 |
| ICICI Prudential Technology Fund | 33.71 | 12,502.97 |
| ICICI Prudential Dividend Yield Equity Fund | 33.59 | 4,682.91 |
Source: Value Research
Overview: This fund focuses on small-cap stocks with high growth potential. It follows an aggressive investment strategy, dynamically adjusting exposure based on market conditions.
AUM: ₹22,832 crore
Top Holdings: Reliance Industries (10.58%), Jio Financial Services (4.78%), Aegis Logistics (4.39%)
Sector Allocation:
Services (17.88%)
Energy (15.22%)
Healthcare (15.13%)
Financial (13.99%)
Performance:
1-Year: -8.38%
3-Year CAGR: 21.72%
5-Year CAGR: 40.83%
Key Metrics:
Expense Ratio: Direct- 0.68%, Regular- 1.65%
Sharpe Ratio: 0.82
Portfolio Beta: 1.06
Overview: This fund invests majorly in infrastructure theme stocks with the freedom to invest across market caps. The scheme capitalises on expanding infrastructure investment opportunities, making it ideal for long-term, high-risk investors.
AUM: ₹2,914 crore
Top Holdings: Larsen & Toubro (10.08%), Reliance Industries (10.08%), ITC Ltd. (8.85%)
Sector Allocation:
Equity & Equity Related Instruments (97.47%)
Money Market Instruments
Net Current Assets (2.53%)
Performance:
1-Year: -14.16%
3-Year CAGR: 19.00%
5-Year CAGR: 33.57%
Key Metrics:
Expense Ratio: Expense Ratio: Direct- 0.75%, Regular- 1.97%
Sharpe Ratio: 1.11
Portfolio Beta: 1.13
Overview: ICICI Prudential Commodities Fund invests in commodity-related sectors like metals, mining, and chemicals, aiming for long-term capital appreciation. It benefits from global commodity cycles and infrastructure growth but carries sectoral volatility. Ideal for high-risk investors seeking exposure to commodity-driven industries.
AUM: ₹2,390.54 crore
Top Holdings: Jindal Steel & Power (9.41%), JSW Steel (7.96%), Hindalco (7.29%), Ambuja Cements (6.80%)
Sector Allocation:
Metals & Mining (44.55%)
Chemicals (30.82%)
Construction Materials (19.54%)
Performance:
1-Year: -3.44%
3-Year CAGR: 14.33%
5-Year CAGR: 30.88%
Key Metrics:
Expense Ratio: Direct- 1.05%, Regular- 2.06%
Sharpe Ratio: 0.49
Portfolio Beta: 0.84
Overview: ICICI Prudential Infrastructure Fund focuses on companies driving India's infrastructure growth, including construction, capital goods, and power. It aims for long-term capital appreciation by leveraging policy-driven investments and economic expansion. Best suited for high-risk investors seeking exposure to the infrastructure sector.
AUM: ₹6,886.49 crore
Top Holdings: Larsen & Toubro (9.43%), Adani Ports (4.19%), Shree Cements (3.90%), ICICI Bank (3.48%)
Sector Allocation:
Financial Services (16.91%)
Construction (16.79%)
Capital Goods (12.45%)
Construction Materials (11.94%)
Performance:
1-Year: 1.57%
3-Year CAGR: 26.87%
5-Year CAGR: 29.29%
Key Metrics:
Expense Ratio: Direct- 1.16%, Regular- 1.87%
Sharpe Ratio: 1.26
Portfolio Beta: 0.53
Overview: Quant ELSS Tax Saver Fund follows a flexi-cap approach, making it ideal for long-term investors while offering 80C tax savings benefits.
AUM: ₹9,486 crore
Top Holdings: Reliance Industries (10.09%), Adani Power (7.11%), Samvardhana Motherson (6.27%)
Sector Allocation: Broad diversification across Financials, Infrastructure, and Industrial sectors
Performance:
1-Year: -11.30%
3-Year CAGR: 15.15%
5-Year CAGR: 30.35%
Key Metrics:
Expense Ratio: Expense Ratio: Direct- 0.5%, Regular- 1.68%
Sharpe Ratio: 1.07
Portfolio Beta: 1.06
Value Research, an investment research firm, evaluates equity mutual funds based on several factors, including 3-5 year returns, the level of risk taken to achieve those returns, and the fund’s overall history. In simple terms, funds are assessed based on their risk and performance, which are combined to determine a final star rating. To be eligible for rating, mutual funds must have been operational for at least three years, belong to a category with a minimum of ten funds, and must not have undergone major changes in recent years.
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Equity mutual funds, with a minimum allocation of 65% to equities and equity-related securities, are ideal for investors aiming for capital growth through a diversified stock portfolio. These funds cater to individuals willing to accept moderate to high risk in pursuit of potentially higher returns. They are most suitable for:
Equity mutual funds typically carry moderate to high risk. Even the highest-rated funds can experience price fluctuations and short-term volatility. Therefore, these funds could be a suitable investment option if you have a moderate to high-risk tolerance.
Many investors wish to participate in the equity market but may be unable to due to limited capital. Equity mutual funds provide a solution by allowing them to start investing with as little as ₹100, making market participation more accessible.
Equity funds, particularly ELSS funds, are ideal for investors who combine tax savings with long-term wealth creation. These funds provide tax benefits under Section 80C of the Income Tax Act, allowing investors to reduce their taxable income by up to ₹1.5 lakh. In addition to tax savings, equity mutual funds offer the potential for positive long-term returns, making them a valuable investment option.
Equity mutual funds are ideal for long-term investors. Although they may experience short-term volatility, they generally have the potential to generate strong returns over time. A longer investment horizon enables investors to withstand market fluctuations and capitalise on the growth of the stocks within the portfolio.
Many investors wish to enter the stock market but may lack the knowledge to select the right stocks. Equity mutual funds provide a solution by allowing beginners to gain stock market exposure. With these funds, investors can benefit from the expertise of professional fund managers who make stock selection decisions on their behalf.
One should always keep the following factors in mind before investing in any of the best-rated mutual funds in 2025:
When evaluating top-rated equity mutual funds for investment, it’s essential to assess their historical performance across different time frames. A consistent and positive track record indicates the fund’s ability to adapt to market fluctuations and generate stable returns.
The expense ratio is the fee a fund house charges for managing your investments. A lower expense ratio means lower costs for investors. Therefore, when selecting the best equity mutual funds in 2025, choosing a fund house that offers competitive fees and reasonable charges on your investments is important.
| Scheme Name | Return 5 Year (%) Direct | Daily AUM (Cr.) | Direct Plan - Total TER (%) |
| Kotak Emerging Equity Fund | 28.45 | 45,334.82 | 0.45 |
| Bandhan Small Cap Fund | 35.45 | 8,777.9 | 0.46 |
| Quant ELSS Tax Saver Fund | 37.0 | 9,930.78 | 0.5 |
| Bank of India Small Cap Fund | 33.73 | 1,446.04 | 0.54 |
| Mirae Asset Large Cap Fund | 20.57 | 35,891.69 | 0.55 |
| Quant Flexi Cap Fund | 36.67 | 7,921.36 | 0.62 |
| Quant Mid Cap Fund | 36.11 | 7,921.36 | 0.62 |
| Parag Parikh Flexi Cap Fund | 27.9 | 89,930.64 | 0.63 |
| Mirae Asset Large & Midcap Fund | 24.39 | 34,625.83 | 0.63 |
| Kotak Flexicap Fund | 21.68 | 46,597.02 | 0.64 |
| Quant Small Cap Fund | 48.23 | 23,817.70 | 0.68 |
| ICICI Prudential Dividend Yield Equity Fund | 33.59 | 4,682.91 | 0.68 |
Source: Value Research
Assess the fund’s objective to ensure it aligns with your investment goals. Understanding its purpose and risk profile is essential for making informed decisions and working toward long-term financial success.
Market movements don’t solely influence an equity fund’s performance; the fund manager’s expertise also plays a crucial role. A manager’s experience, track record, and decision-making skills can significantly impact returns. Evaluating their history and past performance helps assess the fund’s potential to generate positive returns.
Portfolio Diversification: Equity mutual funds enhance portfolio diversification by investing in a wide range of stocks. This helps reduce the impact of underperforming assets and strengthens the overall investment strategy.
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Risk Mitigation: Diversifying equity mutual funds helps manage risk by minimising the impact of volatility in individual stocks. This strategy enhances portfolio stability and reduces exposure to market fluctuations.
Trust building: Equity mutual funds operate within a regulated framework, ensuring transparency, security, and compliance. This regulatory oversight fosters investor confidence and trust in the fund’s management and operations.
Market Risk: Market risk can lead to investment losses due to overall market downturns. Factors such as inflation, deflation, political instability, and interest rate fluctuations can contribute to this risk.
Interest Rate Risk: Interest rates fluctuate based on the availability of credit for lenders and the demand from borrowers. Security prices tend to decline when interest rates rise during an investment period, highlighting their inverse relationship.
Liquidity Risk: Liquidity risk refers to the challenge of redeeming an investment without incurring a loss in its value. This can arise due to factors such as rising interest rates, currency fluctuations, and other market conditions, making it challenging to sell funds and access cash when needed.
Conclusion
Investing in mutual funds demands careful research and a solid grasp of market trends. Investors can choose funds that align with their financial goals, whether focusing on high returns, low expense ratios, or a larger AUM for stability.
However, past performance is not a reliable indicator of future returns, as market conditions constantly evolve. Evaluating your risk tolerance, investment horizon, and financial objectives before making investment decisions is essential. Seeking guidance from a financial advisor and staying informed about market trends can help optimise your investment strategy.
Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully. This article is for general informational purposes only and is not an investment advice. The list of funds mentioned above are based on ratings assigned by Value Research. Please do your own analysis or take independent professional financial advice before making any investments based on your own personal circumstances.
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