Mutual Fund Returns in the Top Performing Funds in India for 2025

When you are looking to maximise your investment returns, exploring top return mutual funds might be a strategic approach. Mutual funds offer a diversified investment option managed by professionals, and those with high returns have demonstrated their potential to outperform the market over various periods. Understanding what makes these funds perform well, the risks involved, and the factors to consider before investing can help you make informed decisions. This guide will delve into the intricacies of some of the top performing mutual funds in India, providing insights into how they work, who should consider investing in them, and the key aspects to evaluate to enhance your investment strategy.

Top 10 High Return Mutual Funds in India (2024)

Name	Sub Category	AUM (in Cr.)	Sharpe Ratio	Time since inception	CAGR 5Y (%)	3Y Avg Annual Rolling Return (%)	Returns vs sub-category - 5Y (%)	Alpha (%)	Volatility (%)
Parag Parikh Flexi Cap Fund	Flexi Cap Fund	84,640.59	2.04	140	26.65	22.11	1.87	4.09	11.04
ICICI Pru Bluechip Fund	Large Cap Fund	63,938.03	1.46	144	19.94	21.39	1.42	2.27	13.19
Nippon India Small Cap Fund	Small Cap Fund	61,646.36	1.58	144	37.86	35.69	1.27	2.79	17.40
Kotak Emerging Equity Fund	Mid Cap Fund	52,048.91	1.97	144	29.47	26.07	1.23	4.07	16.28
SBI BlueChip Fund	Large Cap Fund	50,502.29	1.25	144	17.69	16.62	1.26	1.33	12.16
ICICI Pru Value Discovery Fund	Value Fund	48,987.78	1.88	144	26.58	26.71	1.33	3.23	11.54
SBI Contra Fund	Contra Fund	41,906.90	1.52	144	31.10	30.71	1.26	2.42	14.09
Nippon India Multi Cap Fund	Multi Cap Fund	39,000.80	1.73	144	25.94	31.35	1.23	3.34	15.29
Nippon India Large Cap Fund	Large Cap Fund	35,313.48	1.41	144	21.19	24.70	1.51	2.08	14.46
SBI Focused Equity Fund	Focused Fund	34,747.29	1.54	144	18.51	16.24	1.14	2.58	11.59

Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.

Note: The data on the top 10 mutual funds with highest return in India list is from 18th December 2024 and the data is derived from Tickertape Mutual Fund Screener. It is from a pre-built screen called ‘Consistent Out-performers’. Try it out now!

🚀 Pro Tip: Use Tickertape’s Mutual Fund Screener  to filter and compare funds based on performance, expense ratio, and risk. Find funds that match your goals and risk tolerance for smarter investment choices.

Details of the Mutual Funds With Good Returns

Parag Parikh Flexi Cap Fund

Managed by PPFAS Asset Management Private Ltd., Parag Parikh Flexi Cap Fund is a versatile fund operating since 2012. The AMC is registered as a trust under the Indian Trust Act, 1882, and regulated by SEBI under registration code MF/069/12.  As part of the list of best mutual funds in India, it offers an impressive 5-year CAGR of 26.94%, making it a top choice for long-term investors. With a Sharpe Ratio of 2.04, it provides superior risk-adjusted returns. The fund has an exit load of 2.00% and allows investments with a minimum lumpsum of ₹1,000.

ICICI Prudential Bluechip Fund

Managed by ICICI Prudential Asset Management Company Ltd., a joint venture between ICICI Bank and Prudential Plc, this fund is a leader in the large-cap equity category. It boasts a 5-year CAGR of 19.94%. This makes it one of the best mutual funds to invest in, with stable returns relative to its risk, as indicated by a Sharpe Ratio of 1.46. The exit load is 1.00%, and investors can start with a minimum lumpsum of ₹100, making it accessible for retail investors.

Nippon India Small Cap Fund

Nippon India Mutual Fund, with an AAUM of ₹2,79,431 crores, sponsors the Nippon India Small Cap Fund. Among the top performing mutual funds in India, this fund stands out with a remarkable 5-year CAGR of 37.86%, making it one of the best mutual funds to invest in for high-growth opportunities. The Sharpe Ratio of 1.58 signifies balanced risk-adjusted performance. The fund has a 1.00% exit load and does not specify a minimum lumpsum, ensuring flexibility for investors.

Kotak Emerging Equity Fund

Managed by Kotak Mahindra Asset Management Company Ltd., this fund focuses on emerging equity opportunities. With a solid 5-year CAGR of 29.47%, it’s in the list of best mutual funds in India, catering to investors seeking high-growth mid-cap stocks. Its Sharpe Ratio of 1.97 highlights strong risk-adjusted returns. The fund has an exit load of 1.00% and requires a minimum lumpsum investment of ₹100, offering affordability and growth potential.

SBI Bluechip Fund

Managed by SBI Funds Management Ltd., this fund leverages the rich expertise of SBI and AMUNDI, a French asset management giant. Its 5-year CAGR of 17.69% positions it as one of the best mutual funds to invest in for large-cap equity. However, its Sharpe Ratio of 1.25 indicates relatively lower risk-adjusted returns compared to its peers. The fund charges an exit load of 1.00% and requires a minimum lumpsum of ₹5,000 for investment.

How to Invest in High-Return Mutual Funds?

You can easily invest in mutual funds by following these steps:

• To invest in mutual funds, you can visit an equity investment platform such as smallcase or Tickertape.
• The next step would be to research and identify the best return mutual funds to invest in which aligns with your investment thesis. You can easily select and learn more about the best return mutual funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance. Try it now!
• Once you have selected the funds based on different metrics and parameters, go to smallcase.com or the smallcase app, and login via your phone number. Click on ‘Discover‘ and enter the name of the specific mutual fund name in the search bar and hit enter. You can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!

What is the Best Return Mutual Fund?

The best return mutual fund is one that aligns with your investment goals, risk tolerance, and time horizon while potentially providing superior returns compared to its peers. Top mutual funds typically have consistently outperformed their benchmarks and have strong management teams. These funds typically deliver the best rolling return mutual fund performance over various time frames, making them appealing to a broad range of investors. However, the definition of the “best” can vary depending on individual preferences and market conditions. For some, the best return mutual fund might be one that has performed well over the long term, while others might prioritise short-term gains.

How Does a Mutual Fund With Good Returns Work?

A mutual fund with good returns works by pooling money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. The fund is managed by professional fund managers who aim to maximise returns based on the fund’s investment objectives. Here are key elements:

• Active Management: Fund managers actively buy and sell securities to take advantage of market opportunities and manage risk. They conduct in-depth research and analysis to make informed investment decisions.
• Diversification: By investing in a variety of assets, the fund reduces the risk associated with any single investment. This means if one asset performs poorly, others in the portfolio might perform well, balancing the overall return.
• Compounding: The returns generated by the investments are reinvested to generate more returns, leading to compound growth over time. Strong rolling returns mutual funds leverage this principle, enabling investors to achieve significant long-term gains.

Features of High-Return Mutual Funds

High-return mutual funds, including the best performing options, possess distinct features that set them apart:

• Strong Historical Performance: These funds have demonstrated the ability to deliver superior returns over a significant period. They often outperform their benchmarks and peers.
• Experienced Fund Management: Seasoned professionals with a proven track record manage them. The expertise and experience of the fund manager can play a critical role in the fund’s performance.
• High Volatility: These funds often focus on assets with high return potential, such as those included in best flexi cap mutual funds, which may result in greater price fluctuations.
• Sector Focus: Many high-return funds focus on specific sectors or themes expected to outperform the broader market. For example, a fund might focus on emerging technologies or renewable energy.

Advantages of Investing in MF With Highest Return

Investing in the highest return mutual fund in India can offer several advantages:

• Potential for High Returns: These funds may provide significant returns, potentially outperforming other investment options. This can help you achieve your financial goals faster.
• Professional Management: Experienced professionals manage the funds and make informed investment decisions. This is particularly advantageous for investors who lack the time or expertise to track rolling returns of mutual funds or manage investments actively.
• Diversification: Diversification is key to maintaining consistent returns on mutual funds in India. By spreading investments across various assets, they can reduce the impact of poor performance by any single asset.
• Liquidity: These funds generally offer high liquidity, allowing you to buy and sell units easily. This means you can access your money when you need it, unlike some other investment options that might have lock-in periods.

How Returns are Calculated in Mutual Funds? (Formula)

Calculating mutual fund returns can help you understand the performance of your investments. The most common formula used is the Compound Annual Growth Rate (CAGR):

CAGR = [(Ending Value/beginning Value)^1/n] – 1

Where:

• Ending Value is the value of the investment at the end of the period.
• Beginning Value is the value of the investment at the beginning of the period.
• n is the number of years.

For example,  if the NAV of a mutual fund increased from ₹100 to ₹150 over three years:

CAGR = [(150/100)^⅓] – 1 

This will come approximately 0.1447 or 14.47%. In this way, you can calculate returns for all mutual funds.

Using CAGR, you can analyse the average mutual fund return in India and compare funds over a consistent timeframe. It’s particularly helpful for evaluating rolling returns of mutual funds across various periods.

How to Choose Best Mutual Funds With Good Returns for Investing?

Choosing the best mutual funds with good returns can be a strategic decision that involves careful consideration of various factors. Here are steps you might consider to make an informed choice:

1. Define Your Investment Goals: Identifying your financial objectives can guide your selection of mutual funds. Whether you seek long-term growth, income, or a combination of both, aligning your goals with the fund’s strategy is crucial.
2. Research Fund Performance: Evaluate funds with a history of strong performance. You can look for the best mutual fund returns over the last 10 years to understand how the fund has managed market fluctuations.
3. Assess Risk Tolerance: High-return mutual funds often come with higher risk. Exame the fund’s volatility and how the most return mutual fund has performed in downturns. For a deeper analysis, evaluate the rolling return of mutual funds to understand how it performs over time.
4. Check Fund Manager’s Track Record: The experience and track record of the fund manager can significantly impact the fund’s performance. Funds managed by seasoned professionals with a history of delivering good returns can be more reliable.
5. Understand Fees and Expenses: Mutual fund returns can be affected by the fees and expenses associated with the fund. Comparing the expense ratios of different funds can help you choose the best return mutual funds in India that offers good returns without high costs.
6. Diversify Investments: Diversification can help manage risk in the fund portfolio. You might consider spreading your investments across various funds to balance potential returns and risks.

Who Should Explore High Return Mutual Funds?

Investing in high-return mutual funds may not be suitable for everyone. Here are some personas that might find these funds appropriate:

1. Young Professionals: Individuals early in their careers might seek high returns to build wealth over time. With a longer investment horizon, they can potentially ride out market volatility.
2. Risk-Tolerant Investors: Those comfortable with market fluctuations and willing to accept higher risks for the possibility of higher returns might find these funds attractive.
3. Experienced Investors: Investors with a good understanding of market dynamics and mutual funds might choose high-return funds to diversify their portfolios.
4. Long-Term Planners: Individuals planning for long-term goals, such as retirement, might invest in high-return mutual funds to maximise their wealth accumulation.
5. Wealth Accumulators: Those with a focus on growing their wealth quickly might prefer high-return mutual funds despite the risks involved.

Risks Involved While Investing in a Mutual Fund With Good Returns

While high-return mutual funds can offer significant rewards, they also come with certain risks:

1. Market Risk: The value of investments can fluctuate due to market conditions, affecting the mutual fund returns of even the best high return mutual funds.
2. Credit Risk: If the fund invests in debt securities, there is a risk that the issuer might default on payment, impacting the fund performance of even the best returns mutual funds.
3. Liquidity Risk: Some of the highest return mutual funds invest in assets that are not easily sold, leading to liquidity risk and difficulties in liquidating positions without affecting the price.
4. Interest Rate Risk: Changes in interest rates can impact the returns of funds that invest in bonds or other fixed-income securities.
5. Management Risk: The fund’s performance is also dependent on the decisions made by the fund manager. Poor decisions can lead to lower returns in even the highest returns mutual funds.

Taxation of Mutual Funds as per the Union Budget 2024-25

The taxation on capital gains from your high returns mutual funds is based on their holding periods and asset allocation. A few revisions were made to the tax rates, depending on their types, in the Union Budget 2024-25. It may be important to learn about these revisions when considering mutual funds with good returns. These changes include:

Equity Mutual Funds

1. Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
2. Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
3. Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 12 months	15%	20%
Long-Term Capital Gains (LTCG)	More than 12 months	10%	12.50%

Debt Mutual Funds

1. Tax Rate: A flat 12.5% tax rate applies to these gains.
2. No Indexation Benefit: The previous benefit of adjusting the purchase price for inflation is removed. Now, the entire gain after three years is taxable at 12.5%.

• Change in Holding Period for Specified Mutual Funds: Previously, debt mutual funds with a holding period of over 36 months were taxed based on the investor’s tax slab, classified as Long-Term Capital Gains (LTCG). Now, for specified mutual funds where over 65% of the investment is in debt, the holding period for taxation has been reduced to over 24 months. These funds will still be taxed according to the investor’s tax slab as either LTCG or STCG. 

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 36 months	Taxed according to your income tax slab	Taxed according to your income tax slab
Long-Term Capital Gains (LTCG)	More than 36 months	10%	12.50%

Hybrid Mutual Funds

Type of Hybrid  Fund	Short-Term Capital Gains (STCG)	Long-Term Capital Gains (LTCG)	Indexation Benefit
Equity-Oriented Hybrid Funds	20% for holdings less than 1 year	12.5% for holdings over 1 year, with gains up to Rs. 1.25 lakh tax-free	Not available
Debt-Oriented Hybrid Funds	Taxed as per income tax slab for holdings less than 3 years	12.5% for holdings over 3 years	Not available

Note: Mutual fund schemes where neither the equity nor debt orientation exceeds 65% will now be classified as long-term investments after 24 months. The previous holding period for these funds was 36 months. These will be taxed at the revised LTCG tax rate of 12.5%.

Factors to Consider While Investing in the Best Return Mutual Fund

When investing in top return mutual funds, you might consider the following factors:

1. Investment Objective: You may want to align the mutual fund’s objective with your financial goals. Whether you seek growth, income, or capital preservation, choosing a fund that matches your needs can be important.
2. Historical Performance: Reviewing the fund’s past performance, especially the average mutual fund return, might provide insights into its potential future performance.
3. Expense Ratio: Lower expense ratios can enhance overall returns. Comparing the expense ratios of similar funds can help you evaluate cost efficiency.
4. Fund Manager Experience: The expertise and experience of the fund manager might significantly influence the fund’s performance.
5. Risk-Adjusted Returns: Evaluating how much risk the fund takes to achieve its returns can be crucial. A fund with high returns but even higher risk might not be suitable for all investors.
6. Portfolio Diversification: Ensuring the fund invests in a diversified portfolio might help manage risks and improve the chances of stable returns.

To Wrap Up…

Investing in high-return mutual funds requires careful consideration of various factors, including your financial goals, risk tolerance, and investment horizon. By conducting thorough research, evaluating historical performance, and understanding the risks and taxation involved, you can make informed decisions that align with your investment strategy. Remember to regularly review your portfolio and adjust as necessary to stay on track with your financial objectives.

Frequently Asked Questions About Best Return Mutual Fund

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