Mutual funds are a popular investment choice for individuals looking to grow their wealth over time. Whether you are a seasoned investor or just starting, analysing a fund’s long-term performance can help you make smarter investment decisions. Over the last 5 years, several mutual funds have delivered impressive returns, making them stand out in their respective categories. In this blog, we will look at the best mutual funds in India based on their 5-year annualised returns.
These funds are categorised into Equity, Debt, and Hybrid fund types to help you choose the right fund that aligns with your financial goals.
List of Best Performing Mutual Funds in India as of Last 5 Years (as per 5Y Annualised Returns)
The following table highlights the best-performing mutual funds in India over the last 5 years, categorised by their fund type:
| Fund Category | Fund Name | 5Y Return (Annualised) |
| Equity | Quant Infrastructure Fund Direct-Growth | 41.81% |
| Quant Small Cap Fund Direct Plan-Growth | 40.19% | |
| Quant Mid Cap Fund Direct-Growth | 38.69% | |
| Bank of India Small Cap Fund Direct-Growth | 34.17% | |
| Tata Small Cap Fund Direct-Growth | 33.44% | |
| Debt | Aditya Birla Sun Life Medium Term Plan Direct-Growth | 9.31% |
| DSP Government Securities Direct Plan-Growth | 8.78% | |
| SBI Magnum Gilt Fund Direct-Growth | 8.41% | |
| ICICI Prudential Gilt Fund Direct Plan-Growth | 8.33% | |
| ICICI Prudential All Seasons Bond Fund Direct Plan-Growth | 8.33% | |
| Hybrid | Quant Multi Asset Fund Direct-Growth | 30.11% |
| Quant Absolute Fund Direct-Growth | 26.02% | |
| Bank of India Mid & Small Cap Equity & Debt Fund Direct-Growth | 23.30% | |
| ICICI Prudential Equity & Debt Fund Direct-Growth | 21.34% | |
| JM Aggressive Hybrid Fund Direct-Growth | 20.72% |
Top Performing Equity Mutual Funds
Equity mutual funds primarily invest in stocks, offering high growth potential over the long term. Here are the top-performing equity mutual funds based on 5-year annualised returns:
- Quant Infrastructure Fund Direct-Growth
- 5Y Return: 41.81%
- This fund focuses on infrastructure sector investments, delivering exceptional returns for aggressive investors.
- Quant Small Cap Fund Direct Plan-Growth
- 5Y Return: 40.19%
- A small-cap focused fund ideal for investors with a high-risk appetite seeking substantial growth.
- Quant Mid Cap Fund Direct-Growth
- 5Y Return: 38.69%
- This fund balances growth and risk by investing in mid-sized companies with high potential.
- Bank of India Small Cap Fund Direct-Growth
- 5Y Return: 34.17%
- Offers strong growth opportunities through small-cap companies.
- Tata Small Cap Fund Direct-Growth
- 5Y Return: 33.44%
- A well-managed small-cap fund that provides consistent performance.
Top Performing Debt Mutual Funds
Debt mutual funds invest in fixed-income securities such as bonds and government instruments. They offer lower risk and steady returns, making them suitable for conservative investors.
- Aditya Birla Sun Life Medium Term Plan Direct-Growth
- 5Y Return: 9.31%
- Focuses on medium-term fixed-income instruments with stable returns.
- DSP Government Securities Direct Plan-Growth
- 5Y Return: 8.78%
- Invests in government securities, offering low-risk and steady income.
- SBI Magnum Gilt Fund Direct-Growth
- 5Y Return: 8.41%
- A gilt fund that provides safety and reliable returns.
- ICICI Prudential Gilt Fund Direct Plan-Growth
- 5Y Return: 8.33%
- Primarily invests in government bonds for risk-averse investors.
- ICICI Prudential All Seasons Bond Fund Direct Plan-Growth
- 5Y Return: 8.33%
- A dynamic bond fund with flexible investment strategies.
Top Performing Hybrid Mutual Funds
Hybrid mutual funds invest in a mix of equity and debt, offering a balance of growth and stability. These funds are suitable for investors with a moderate risk appetite.
- Quant Multi Asset Fund Direct-Growth
- 5Y Return: 30.11%
- A multi-asset fund offering growth by investing in equity, debt, and other asset classes.
- Quant Absolute Fund Direct-Growth
- 5Y Return: 26.02%
- A hybrid fund combining equity and debt to deliver strong returns.
- Bank of India Mid & Small Cap Equity & Debt Fund Direct-Growth
- 5Y Return: 23.30%
- Balances growth from mid and small-cap stocks with debt for stability.
- ICICI Prudential Equity & Debt Fund Direct-Growth
- 5Y Return: 21.34%
- A consistent performer offering a mix of equity and debt investments.
- JM Aggressive Hybrid Fund Direct-Growth
- 5Y Return: 20.72%
- Designed for investors looking for higher equity exposure with moderate risk.
Summary
The above-listed funds represent the best mutual funds in India over the past 5 years, offering impressive returns across different categories. Whether you are an aggressive equity investor, a conservative debt investor, or prefer a balanced hybrid approach, these funds cater to diverse financial goals and risk appetites.
Factors to Consider Before Investing in the Best Mutual Funds in India
Before choosing a mutual fund, here are the key factors you should consider:
- Investment Objective:
Align the fund’s objective with your financial goals, such as wealth creation, retirement planning, or tax saving.
- Risk Appetite:
Assess your risk tolerance and choose funds that match your comfort level (equity for high risk, debt for low risk, hybrid for balanced risk).
- Historical Performance:
Analyse the fund’s long-term performance (3-year, 5-year returns) to ensure consistent growth.
- Expense Ratio:
Check the expense ratio, as lower costs lead to higher net returns over time.
- Fund Manager Expertise:
Evaluate the fund manager’s track record and experience in managing mutual funds.
- Investment Horizon:
Choose funds based on your time horizon—short-term (debt), medium-term (hybrid), or long-term (equity).
- Asset Allocation:
Look at the fund’s allocation between equity, debt, and other assets to understand its risk and return potential.
- Fund Category:
Decide between equity, debt, or hybrid funds depending on your financial needs and market conditions.
- Tax Efficiency:
Consider the tax implications on capital gains and dividends while selecting a fund.
- Exit Load and Lock-in Period:
Check for any exit load charges or lock-in periods that may impact liquidity.
Conclusion
The best mutual funds in India over the last 5 years have demonstrated impressive performance across equity, debt, and hybrid categories. Whether you aim for high growth, steady income, or a balanced approach, there is a mutual fund to meet your investment needs.
By evaluating factors such as risk appetite, investment horizon, and fund performance, you can make an informed decision and choose a mutual fund that aligns with your financial goals. Start investing today to build a secure and prosperous future.
FAQs
1. What are the best mutual funds in India over the last 5 years?
The best-performing mutual funds based on 5-year annualised returns include Quant Infrastructure Fund Direct-Growth (41.81%), Quant Small Cap Fund Direct Plan-Growth (40.19%), and Quant Mid Cap Fund Direct-Growth (38.69%) in the equity category. In debt, Aditya Birla Sun Life Medium Term Plan Direct-Growth (9.31%) leads the pack, while Quant Multi Asset Fund Direct-Growth (30.11%) performs best in the hybrid category.
2. How do I choose the best mutual fund for investment?
To choose the best mutual fund, consider factors like your financial goals, risk appetite, investment horizon, expense ratio, fund manager’s expertise, and the fund’s historical performance. Also, ensure the fund’s category (equity, debt, or hybrid) aligns with your investment objective.
3. What is the difference between equity, debt, and hybrid mutual funds?
- Equity funds invest primarily in stocks and offer high growth potential but carry higher risk.
- Debt funds invest in fixed-income securities like bonds and government instruments, providing stable but lower returns.
- Hybrid funds combine equity and debt to balance growth and stability, making them suitable for moderate-risk investors.
4. Which mutual fund gave the highest return in the last 5 years?
The Quant Infrastructure Fund Direct-Growth provided the highest return in the last 5 years with an impressive annualised return of 41.81%.
5. Are mutual funds safe for long-term investment?
Yes, mutual funds are considered safe for long-term investments, especially when you choose funds aligned with your risk tolerance and goals. Equity mutual funds can be volatile in the short term but have historically delivered strong returns over longer durations.
6. Should I invest in equity or hybrid mutual funds for 5 years?
If you have a higher risk tolerance, equity funds are ideal as they provide higher returns over 5 years. If you prefer a balanced approach with moderate risk, hybrid mutual funds are a better option, as they combine equity growth with debt stability.
7. What is the 5-year return of the top-performing debt mutual funds?
The top-performing debt mutual funds over the last 5 years are:
- Aditya Birla Sun Life Medium Term Plan Direct-Growth: 9.31%
- DSP Government Securities Direct Plan-Growth: 8.78%
- SBI Magnum Gilt Fund Direct-Growth: 8.41%
8. What is an expense ratio in mutual funds, and why is it important?
The expense ratio is the annual fee charged by the mutual fund for managing your investment. It impacts your net returns—lower expense ratios ensure more of your returns stay with you. Always compare expense ratios before investing.
9. Are small-cap mutual funds good for long-term growth?
Yes, small-cap mutual funds are suitable for long-term investors with a high-risk appetite. They invest in smaller companies with growth potential and have delivered strong returns historically, such as the Quant Small Cap Fund (40.19%).
10. Can I start investing in these funds with a small amount?
Yes, you can start investing in mutual funds through SIP (Systematic Investment Plan) with as little as ₹500 per month. SIPs are a great way to build wealth gradually while managing market volatility.
Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.
