"Top Equity Mutual Funds in India 2025: Best Picks for High Returns

 

Mutual funds are investment baskets that include stocks, bonds, and other securities.  Mutual funds are a popular way to invest in a variety of assets at once, and you may have exposure to hundreds of stocks, bonds, and other investments in a single mutual fund. This is one of the main reasons why investing in mutual funds is so popular. 

Returns from various equity mutual funds can vary based on several variables, including risk tolerance, investment period, market conditions, and portfolio mix.  For equity funds, generating good returns over a long period is the main goal.  We will examine the top-rated equity mutual funds in India.

Best 5 Equity Mutual Funds

1. Quant Small Cap Fund

Over the previous five years, the Quant Small Cap Fund has produced significant returns, ranking first in the small-cap allocation.  Although the volatility of smaller companies may make them riskier, this fund concentrates on small-cap equities with great growth potential. 

 

Quant Small Cap Fund is an actively managed small-cap fund that has excelled in recent years, placing it among the best performers in the category throughout a variety of periods.  Due to its active investment strategy, which involves continuously seeking out alluring possibilities, Quant Small Cap Fund is independent of both sectors and benchmarks. 

2. Motilal Oswal Midcap Fund

Exposure to mid-cap firms with substantial growth potential is offered via the Motilal Oswal Midcap Fund. This product has continuously outperformed its peers, and mid-cap funds provide a balance between stability and growth. 

On February 24, 2014, this fund was established. Ajay Khandelwal and Niket Shah oversee the fund's management. In the long term, the fund might outperform inflation. Since its launch, the Motilal Oswal Midcap Fund Direct Growth has produced a CAGR return of 23.39%. The fund has produced a CAGR return of 16.85%, 28.46%, and 27.79% during the last 1, 3, and 5 years, respectively.

3. Small-Cap Fund SBI

A diverse selection of small-cap companies is available through the SBI Small Cap Fund.  This fund is well-liked by investors looking for long-term gain in the small-cap market because of its solid track record over the long run.   As of March 3, 2025, the fund's net asset value (NAV) is ₹166.5363, and it oversees total assets valued at ₹31,227.20 crores.  In the last year, the fund has produced absolute returns of -1.42%.  The fund has produced a CAGR of 15.04% during the past three years.  It has produced a CAGR of 22.99% during the past five years.

4. Axis Small Cap Fund

Investors can profit from up-and-coming companies by investing in smaller companies with the potential for quick growth through the Axis Small Cap Fund.  Since its start on November 11, 2013, this fund has been in operation for 11 years and 3 million dollars.  

As of December 31, 2024, Axis Small Cap Fund Direct-Growth is a medium-sized fund in its category with assets under management (AUM) of ₹23,139 crores.  The direct growth returns of the Axis Small Cap Fund over the past year have been 1.26%.  Average annual returns since debut have been 22.92%.  Every four years, the fund doubles the amount invested.

5. The Quant Flexi Cap Fund

 Quant Flexi Cap Fund's capacity to invest across a range of market caps allows it to adjust to shifting market conditions and strike a balance between stability and expansion prospects in several industries.  This fund was established on January 1, 2013, and it has been in operation for 12 years and 2 months.  

As of 03/03/2025, Quant Flexi Cap Fund Direct-Growth's most recent Net Asset Value (NAV) is 92.79.  The fund's expense ratio of 0.61% is comparable to that of the majority of other Flexi Cap funds.  The Quant Flexi Cap Fund Direct-Growth scheme's performance is comparable to that of the majority of funds in its category.  It has above-average control over losses in a declining market.

Considerations for Equity Mutual Fund Investing

 The following considerations must be made by an investor before purchasing any of the top-rated equities mutual funds for 2025:

 1. Ratio of expenses

 The cost that the fund house charges to handle your investments is known as the expense ratio.  You will spend less on your investments if the expense ratio is lower.  Therefore, you will need to search for a fund company that offers reasonable fees over your investments when looking for the top equity mutual funds in 2025.

2. The performance of funds

 Market trends alone might not be enough to explain an equity fund's success.  The experience of the fund management is also a determining factor.  The performance of a fund can be significantly influenced by the experience, expertise, and track record of its manager.   Even in times of market decline, consistency over an extended period suggests sound investment strategy and competent fund management.  Furthermore, examine the fund's performance in comparison to its rivals and benchmark index.

3. The AMC Track Record

Examining the fund's track record and paying particular attention to its past performance across various periods is essential when evaluating the top-rated equities mutual funds for investment purposes.  

To determine the fund's capacity to handle a range of market conditions and provide dependable returns, look for a consistent and favorable track record.  Assessing an AMC's track record is essential when choosing a mutual fund for SIP since it shows how trustworthy and dependable the company is at handling customers' money.

In Conclusion

equity mutual fund investing presents a great chance to attain long-term financial diversification and growth.  SBI Small Cap Fund, Axis Small Cap Fund, Motilal Oswal Midcap Fund, Quant Small Cap Fund, and Quant Flexi Cap Fund are among India's top-rated equity mutual funds. Each offers special advantages and accommodates a range of risk tolerances and investment objectives.  

It's important to take into account aspects including fund performance, fee ratios, and the Asset Management Company's (AMC) reputation when choosing the finest equities mutual fund for 2025.  By assessing these factors, the possibility of steady and reliable returns is increased and informed decision-making is ensured. 

FAQs on Equity Mutual Funds 

Can novices invest in equities mutual funds?

If a beginner is willing to make long-term investments and can withstand market volatility, equity mutual funds may be appropriate.  For new investors looking to start modestly and take advantage of rupee-cost averaging, SIPs (Systematic Investment Plans) are a great choice.

 How much does an equity mutual fund require as a minimum investment?

 Funds and AMCs have different minimum investment requirements.  Through SIPs, several funds permit investments as low as ₹500 to ₹1,000.

 How do mutual equity funds operate?

 Equity mutual funds invest in a diverse range of equity-related securities by pooling the capital of several participants.  These funds are managed by qualified fund managers who seek to provide returns based on changes in the market and business performance.