High Return Equity Mutual Funds in India: Highest 5-Year Returns Ranked

Through a global pandemic, aggressive interest rate hikes, geopolitical shocks, and relentless market volatility, most equity funds didn’t just survive. They delivered double-digit annualised returns that no fixed deposit, gold, or real estate investment could come close to matching.

But returns alone don’t tell the full story. A fund that shot up 80% in a single year and flatlined for four is very different from one that compounded steadily at 18-22% CAGR across market cycles.

That consistency, through the highs of 2021, the crash of 2022, and the recovery that followed, is what separates a genuinely high-performing equity fund from one that simply got lucky with timing.

Here, we will look at five such high return equity mutual funds ranking at the top of return charts.

#1 ICICI Pru Infrastructure Fund

First on the list is the direct growth plan of ICICI Pru Infrastructure Fund.

When most first-time investors think of mutual funds, they picture diversified portfolios spread across sectors. ICICI Prudential Infrastructure Fund takes a different with a more focused bet.

And over the last five years, that bet has paid off handsomely.

This fund puts at least 80% of its money into companies operating in India’s infrastructure space: think roads, airports, power, construction, and real estate.

It’s a sectoral fund, which means it rises and falls with the fortunes of one theme. But that theme, backed by India’s decade-long push toward infrastructure development, has been one of the most rewarding stories in the recent past.

Over the past 5 years, the fund has returned 26.6% on a compounded annual growth rate (CAGR) basis. Over three years too, the performance has been commendable.

Data Source: Ace MF

It’s currently ranked #1 out of 18 funds in the equity infrastructure category. Its top holdings include household names like Larsen & Toubro, NTPC, and InterGlobe Aviation.

Data Source: Ace MF

If you believe in India’s infrastructure story, this is one of the top funds to add to your watchlist.

#2 Motilal Oswal Midcap Fund

Next on the list is Motilal Oswal Midcap Fund.

Mid-cap companies sit in a sweet spot currently. They’re companies that have already proven themselves but still have significant room to grow.

Historically, mid-caps have outperformed largecaps over long investment horizons, and the Motilal Oswal Midcap fund is an example of that.

Over 5 years, the fund has returned 23% on a CAGR basis. The performance over 3 years has been commendable too.

Data Source: Ace MF

So, what sets Motilal Oswal Midcap Fund apart from most of its peers? It’s the deliberately concentrated approach.

The scheme seeks to achieve long-term capital appreciation by investing in a maximum of 30 quality mid-cap companies with long-term competitive advantages and potential for growth.

Most mid-cap funds spread their bets across 50-80 stocks, diluting both the risk and the reward. This fund doesn’t do that. It picks its spots carefully, holds conviction, and lets compounding do the heavy lifting.

Here are its top holdings:

Data Source: Ace MF

One thing investors must note: the last one year has been rough for the fund, as it delivered -3%. This is due to the broader market correction. A concentrated portfolio amplifies this, both on the way up and on the way down.

The fund has an expense ratio of 0.85% on the direct plan.

For investors looking a midcap heavy exposure, this is a candidate. It’s mandated to invest at least 65% of the assets in mid-cap stocks at all times.

#3 Nippon India Small Cap Fund

Third on the list is Nippon India Small Cap fund.

If mid-cap companies are India’s tomorrow, small-cap companies are India’s day after.

These are businesses ranked beyond the top 250 by market capitalisation, lesser-known names, operating in niche segments, growing faster than the economy but with far less analyst coverage and institutional backing than their larger counterparts.

That combination of obscurity and growth potential is precisely what makes small-cap investing so rewarding over long horizons.

Nippon India Small Cap Fund is the proof of that in the Indian mutual fund universe.

The fund has an AUM of Rs 618.09 bn, making it the single largest small-cap fund in India by assets.

The fund is so popular that lump sum investments have been suspended since July 2023, and new SIP registrations are capped at Rs 50,000 per day per PAN.

Over the past 5 years, the fund has returned 22.3% on a CAGR basis. The three year performance has also been noteworthy, with 21% annual returns.

Data Source: Ace MF

Samir Rachh has been managing this fund since January 2017, bringing with him over two decades of experience in research, fund management, and wealth management.

Under his watch, the fund focuses on identifying high-growth businesses with reasonable size, quality management, and rational valuations.

This isn’t a fund chasing hot themes or momentum plays. It’s a buy-and-hold operation, built on the conviction that quality small-cap businesses, given enough time, will reward patient investors handsomely.

Here are its top 10 holdings:

Data Source: Ace MF

For a first-time investor building a long-term portfolio, this fund works best as a satellite holding.

#4 DSP India T.I.G.E.R Fund

Next on the list is DSP India T.I.G.E.R Fund.

T.I.G.E.R. stands for The Infrastructure Growth and Economic Reforms Fund, and that second half is what sets this fund apart from every other infrastructure fund on this list, including the ICICI Prudential Infrastructure Fund we covered earlier.

DSP’s Infra fund seeks to generate capital appreciation by investing in equity and equity related securities of corporates that could benefit from ongoing structural changes and economic reforms in the country.

The fund holds companies like Apollo Hospitals, Bharti Airtel, and Multi Commodity Exchange, businesses that are beneficiaries of India’s economic evolution, not its physical construction boom alone.

Data Source: Ace MF

Rohit Singhania has been co-managing this fund since June 2010, over 15 years on the same fund, through bull markets, the 2013 taper tantrum, demonetisation, COVID, and everything in between.

Singhania has a total of 25 years of work experience, with deep expertise in sectors including auto, metals, infrastructure, and capital goods.

Coming to its performance, the fund has returned 25% on a CAGR basis over the past 5 years, while over 3 years, the returns stand at 27%.

Data Source: Ace MF

As always with sectoral and thematic funds, the caveat applied to DSP’s fund as well. Its NAV is likely to fluctuate more than diversified equity funds, and recent or past returns should not be the only criteria used to evaluate it.

The ideal investor for this fund should believe in India’s long-term structural growth story, have a 5-7 year horizon, and understand that the journey will not be a straight line.

#5 Franklin Build India Fund

Last on the list is Franklin Build India Fund.

There’s a reason this fund is called Build India and not just another “Infrastructure Fund.” It reflects a mandate that goes beyond the standard definition of infrastructure to capture the full spectrum of what building a modern nation actually requires.

The scheme aims to generate capital appreciation by investing in companies engaged either directly or indirectly in infrastructure-related activities, including development, operations, management and maintenance of transportation, energy, resources, and other infrastructure.

The fund holds companies like Reliance Industries, ONGC, HDFC Bank, and IndiGo alongside the expected L&T and NTPC.

Here are its top holdings:

Data Source: Ace MF

Coming to its performance, the fund has delivered CAGR returns of 24% over 5 years, while over 3 years, it has returned 26%.

Data Source: Ace MF

The fund management team at Franklin Build India is one of the most academically decorated in the Indian mutual fund industry. Lead fund manager Ajay Argal holds a B.Tech from IIT Mumbai and a PGDM from IIM Bangalore.

Co-manager Kiran Sebastian brings an MBA from the University of Oxford, and Sandeep Manam holds a PGDM from IIM Ahmedabad.

In a segment where infrastructure and thematic funds routinely trade at PE ratios of 28-35, a PE of 19 suggests either that the market hasn’t fully priced in this portfolio’s quality, or that the fund’s energy and oil & gas holdings are providing a valuation anchor.

For a first-time investor building a portfolio around India’s long-term growth story, Franklin Build India offers elite fund management, value-oriented positioning, energy-sector resilience, and one of the strongest 3-year returns in the infrastructure category.

Conclusion

Looking at the five funds on this list, one thread connects all of them: every single one is a bet on India.

But that conviction comes with a price, and that price is volatility. Every fund on this list carries a Very High Risk rating.

These are not funds you put money into and check every week. They are not emergency funds, short-term savings, or capital you cannot afford to lose value in temporarily.

They are instruments designed for patient investors with long time horizons, disciplined SIP habits, and the psychological resilience to stay invested when markets turn ugly.

Before investing, do your own research, check if these align with your risk appetite, and if you’re unsure, talk to your trusted financial advisor.

Happy investing.

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