Top 10 Best Performing Mutual Funds in India in 2026 (Highest Returns in last 3 years)
- infobizaay
- Mar 16
- 6 min read
These 10 mutual funds are among the most popular and high-performing investment options in India. They have gained strong recognition from investors because of their consistent long-term performance and professional fund management. Each fund is managed by experienced portfolio managers who carefully select stocks and assets with the goal of generating stable and attractive returns over time. These mutual funds invest in a variety of sectors and companies, providing diversification that helps reduce investment risk. Due to their reliable track record, strong asset management strategies, and growing investor trust, these funds have become widely preferred choices for individuals looking to build wealth through long-term investments such as SIPs (Systematic Investment Plans) or lump-sum investments.
Top 10 Mutual Funds in India (Last 3 Year Returns)
Rank | Mutual Fund | Category | 3-Year Return (CAGR) |
1 | Quant Small Cap Fund | Small Cap | 22.7% |
2 | Bandhan Small Cap Fund | Small Cap | 31.4% |
3 | Nippon India Small Cap Fund | Small Cap | 21.9% |
4 | Motilal Oswal Midcap Fund | Mid Cap | 25–28% |
5 | Invesco India Mid Cap Fund | Mid Cap | 29% |
6 | Parag Parikh Flexi Cap Fund | Flexi Cap | 18% |
7 | HDFC Mid‑Cap Opportunities Fund | Mid Cap | 23–24% |
8 | HDFC Flexi Cap Fund | Flexi Cap | 20–22% |
9 | ICICI Prudential Large Cap Fund | Large Cap | 16–18% |
10 | SBI ELSS Tax Saver Fund | ELSS / Tax Saving | 20–21% |
Note: This list is done solely based on returns for last 3 years till 5 March 2025 and may change in future. Other factors should also be kept in mind while investing. Data is taken from trusted sources available on internet, kindly make a due diligence before investing.
1. Quant Small Cap Fund
Category: Small Cap Fund
Fund Manager: Mr. Sandeep Tandon, Mr. Ankit Pande, Mr. Varun Pattani , Ms. Ayusha Kumbhat , Mr.Yug Tibrewal, Mr.Sameer Kate, Mr. Sanjeev Sharma
Approx. 3-Year Return: 24–25% CAGR
To achieve the investment objective, the scheme will invest primarily in equity and equity linked instruments of Small Cap companies as defined by SEBI. The underlying theme driving the relative allocation will be QMML research’s ability to identify cross asset, cross market inflexion points. This quantitative approach is based on our proprietary VLRT framework, wherein we incorporate the full spectrum of data along deeper aspects related to the three axis of Valuation, Liquidity, and Risk appetite and view it in a dynamic setting – Time, thus, forming the multi-dimensional VLRT framework. The formulation of this macro narrative guides our micro level stock selection. QMML’s predictive analytics toolbox formulates a multidimensional research perspective to various asset classes. Research has shown that optimal entry and exit points into various asset classes can be identified through the identification of bouts of extreme greed and fear in the market. In the face of this uncertainty and complexity, we have found consistent success by studying markets along four dimensions as opposed to limiting ourselves to any one school of thought: Valuation Analytics, Liquidity Analytics, Risk Appetite Analytics, and Timing.
2. Bandhan Small Cap Fund
Category: Small Cap Fund
Fund Manager: Manish Gunwani
Approx. 3-Year Return: 31% CAGR
Bandhan Small Cap Fund has emerged as one of the top-performing mutual funds in India in the small-cap category. Over the past three years, it has delivered exceptional returns, making it very popular among investors.
The fund focuses on identifying small companies that have the potential to become future industry leaders. It invests in sectors like manufacturing, technology, finance, and consumer goods.
Because of the strong growth potential of small-cap companies, this fund has delivered impressive returns. However, investors should also be aware that small-cap investments may experience short-term volatility. For investors who want high returns and are comfortable with risk, this fund can be a strong addition to their portfolio.
Nippon India Small Cap Fund
Category: Small Cap Fund
Fund Manager: Samir Rachh
Approx. 3-Year Return: 26% CAG
Nippon India Small Cap Fund is one of the largest and most popular small-cap mutual funds in India. The fund has built a strong reputation for its consistent performance and disciplined investment strategy.
It invests in a diversified portfolio of high-potential small companies across different sectors such as manufacturing, financial services, and technology.
The fund manager focuses on companies with strong fundamentals, good management, and long-term growth potential. Because of this strategy, the fund has delivered solid returns over the years.
This fund is suitable for investors who want long-term wealth creation and are willing to accept market volatility.
4. Motilal Oswal Midcap Fund
Category: Mid Cap Fund
Fund Managers: Niket Shah & Siddharth Bothra
Approx. 3-Year Return: 25–28% CAGR
Motilal Oswal Midcap Fund focuses on mid-sized companies that have strong growth potential. Mid-cap companies are usually more stable than small-cap companies but still offer high growth opportunities.
This fund follows a concentrated portfolio strategy, meaning it invests in a limited number of high-quality companies rather than spreading investments across many stocks.
The fund manager selects companies with strong business models, competitive advantages, and long-term growth prospects.
Because of its disciplined investment philosophy, this fund has become a favorite among long-term investors.
5. Invesco India Mid Cap Fund
Category: Mid Cap Fund
Fund Manager: Taher Badshah
Approx. 3-Year Return: 25% CAGR
Invesco India Mid Cap Fund is known for its consistent performance and strong research-based investment approach.
The fund invests in companies that have strong earnings growth and expanding business opportunities. The fund manager carefully selects stocks after detailed research and analysis.
Mid-cap companies often grow faster than large companies because they are still expanding their businesses. This growth potential has helped the fund deliver strong returns.
This fund is ideal for investors looking for long-term capital appreciation through mid-cap companies.
6. Parag Parikh Flexi Cap Fund
Category: Flexi Cap Fund
Fund Managers: Rajeev Thakkar, Raunak Onkar, Raj Mehta
Approx. 3-Year Return: 19–20% CAGR
Parag Parikh Flexi Cap Fund is one of the most trusted mutual funds in India. It is known for its disciplined investment strategy and strong risk management.
One of the unique features of this fund is that it invests in both Indian and international companies, which provides global diversification. The fund has delivered around 19% returns in the last three years, outperforming many funds in its category.
The fund follows a value-investing strategy, meaning it focuses on buying good companies at reasonable prices.
Because of its balanced approach, this fund is suitable for both beginners and long-term investors.
7. HDFC Mid-Cap Opportunities Fund
Category: Mid Cap Fund
Fund Manager: Chirag Setalvad
Approx. 3-Year Return: 27% CAGR
HDFC Mid-Cap Opportunities Fund is one of the most consistent mid-cap mutual funds in India. The fund focuses on companies that have strong business fundamentals and long-term growth potential.
The fund manager uses a bottom-up stock selection strategy, which means companies are selected based on their financial strength and growth potential rather than just market trends.
This disciplined investment approach has helped the fund deliver strong returns for investors.
8. HDFC Flexi Cap Fund
Category: Flexi Cap Fund
Fund Manager: Anil Bamboli
Approx. 3-Year Return: 20% CAGR
HDFC Flexi Cap Fund is a diversified equity mutual fund that invests across large-cap, mid-cap, and small-cap companies.
The flexibility allows the fund manager towhich helps balance risk and return.
The fund typically invests in adjust the portfolio according to market conditions, high-quality companies such as banking, IT, and consumer businesses. Because of its diversified approach, it provides both stability and growth potential.
9. ICICI Prudential Large Cap Fund
Category: Large Cap Fund
Fund Manager: Sankaran Naren
Approx. 3-Year Return: 18–20% CAGR
ICICI Prudential Large Cap Fund focuses on large, well-established companies with strong financial stability.
Large-cap companies are generally less volatile compared to mid-cap and small-cap companies. This makes large-cap funds suitable for investors who want relatively stable returns with lower risk.
The fund manager follows a disciplined investment strategy that focuses on strong business fundamentals and long-term growth potential.
10. SBI ELSS Tax Saver Fund
Category: ELSS (Tax Saving Fund)
Fund Manager: R. Srinivasan
Approx. 3-Year Return: 23% CAGR
SBI ELSS Tax Saver Fund is one of the oldest and most popular tax-saving mutual funds in India.
This fund allows investors to claim tax deductions under Section 80C of the Income Tax Act while also generating long-term capital growth.
The fund invests across multiple sectors, including banking, technology, and consumer goods, to maintain diversification.
Because of its strong performance and tax benefits, this fund remains a popular choice among Indian investors.
Key Trends in Mutual Fund Performance (2023–2026)
Several important trends have shaped mutual fund performance in India:
Mid-Cap and Small-Cap Outperformance
Mid-cap and small-cap funds have delivered the highest returns in recent years.
Infrastructure Sector Growth
Government spending on infrastructure boosted returns for infrastructure funds.
PSU Stocks Rally
Public sector companies have shown strong profitability and growth.
How to Choose a Mutual Fund
Before investing in any mutual fund, consider these factors:
Past Performance
Check returns over 3, 5, and 10 years.
Fund Manager Track Record
Experienced fund managers often deliver better results.
Expense Ratio
Lower expense ratios improve long-term returns.
Risk Level
Choose funds according to your risk tolerance.
Risks of Investing in High-Return Funds
Although high-return funds are attractive, they also carry risks:
· Market volatility
· Sector concentration risk
· Economic slowdown
Investors should diversify their portfolio across different categories.
Conclusion
The Indian mutual fund industry continues to grow rapidly, offering investors numerous opportunities to build wealth. Many funds have delivered strong 3-year returns above 25% CAGR, demonstrating the potential of equity mutual funds for long-term investing.
However, investors should remember that past performance does not guarantee future returns. The best approach is to build a diversified portfolio and invest with a long-term perspective.
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