Equity mutual funds aim to generate returns by investing in stocks of publicly listed companies across various market capitalizations. As per SEBI’s mandate, these mutual funds must invest at least 65% of the pooled capital in equities and equity securities, while the remaining 35% may be invested in money-market instruments or debt instruments. The composition of an equity mutual fund's portfolio relies on the skill of the fund manager, who is in charge of choosing the assets.
Different equity mutual funds may generate different returns depending on factors like portfolio composition, market conditions, investment time period, and risk level. The primary objective of equity funds is to achieve positive returns over an extended time horizon.
Let’s take a look at the Best Rated Equity Mutual Funds in India. The list of funds mentioned below are based on ratings assigned by Value Research, and are not a form of recommendation by Groww.
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| Fund Name | Category | Risk | NAV | Expense Ratio | 1Y Returns | 3Y Returns | 5Y Returns | 7Y Returns | 10Y Returns | Rating | Fund Size (in Cr) | Exit Load |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Bandhan Small Cap Fund | Equity | Very High | 52.16 | 0.77 | 15.1% | 32.2% | 24.6% | -- | -- | 5 | ₹20,129 | Exit load of 1%, if redeemed within 1 year. |
Parag Parikh Flexi Cap Fund | Equity | Very High | 91.29 | 0.77 | 4.4% | 17.6% | 16.8% | 19.6% | 18.2% | 5 | ₹1,28,966 | For units above 10% of the investment, exit load of 2% if redeemed within 365 days and 1% if redeemed after 365 days but on or before 730 days. See more |
HDFC Mid Cap Fund | Equity | Very High | 217.72 | 0.73 | 11.4% | 24.4% | 22.1% | 20.9% | 19.0% | 5 | ₹85,357 | Exit load of 1% if redeemed within 1 year. |
Motilal Oswal Midcap Fund | Equity | Very High | 104.87 | 0.82 | -3.0% | 22.1% | 24.1% | 21.4% | 17.9% | 3 | ₹31,046 | Exit load of 1%, if redeemed within 365 days.
|
Nippon India Small Cap Fund | Equity | Very High | 192.08 | 0.8 | 11.2% | 22.0% | 23.4% | 24.1% | 22.0% | 4 | ₹61,808 | Exit load of 1% if redeemed within 1 year. |
HDFC Flexi Cap Direct Plan-Growth | Equity | Very High | 2,137.00 | 0.67 | 1.9% | 19.6% | 20.3% | 17.1% | 17.1% | 5 | ₹91,334 | Exit load of 1% if redeemed within 1 year
|
Quant Small Cap Fund | Equity | Very High | 280.48 | 0.7 | 9.4% | 21.3% | 23.3% | 28.2% | 19.9% | 4 | ₹25,820 | Exit load of 1% if redeemed within 1 year |
SBI PSU Direct Plan-Growth | Equity | Very High | 39.84 | 0.85 | 17.6% | 32.2% | 28.3% | 20.8% | 16.6% | -- | ₹5,891 | Exit load of 0.50% if redeemed within 30 days. |
Nippon India Large Cap Fund | Equity | Very High | 99.55 | 1.32 | 3.9% | 17.1% | 18.1% | 14.9% | 15.9% | 5 | ₹46,520 | Exit load of 1% if redeemed within 7 days. |
Motilal Oswal BSE Enhanced Value Index Fund | Equity | Very High | 28.46 | 0.65 | 19.5% | 31.6% | -- | -- | -- | 5 | ₹1,570 | Exit Load: 1%- If redeemed on or before 15 days from the date of allotment. See more |
Edelweiss US Technology Equity FoF Direct-Growth | Equity | Very High | 37.05 | 0.7 | 51.1% | 35.7% | 14.6% | -- | -- | -- | ₹3,255 | Exit load of 1%, if redeemed within 90 days. |
Nippon India Growth Mid Cap Fund | Equity | Very High | 4,747.21 | 1.19 | 13.2% | 26.4% | 23.2% | 22.3% | 19.9% | 5 | ₹39,676 | Exit load of 1% if redeemed within 1 months |
UTI Nifty 50 Index Fund | Equity | Very High | 167.77 | 0.26 | -0.5% | 10.9% | 11.4% | 11.8% | 12.9% | 3 | ₹24,433 | - |
Aditya Birla Sun Life PSU Equity Fund | Equity | Very High | 40.77 | 0.66 | 17.6% | 29.8% | 28.5% | -- | -- | -- | ₹5,334 | Exit load of 1% if redeemed within 30 days. |
Motilal Oswal Large and Midcap Fund | Equity | Very High | 37.80 | 0.91 | 16.8% | 27.1% | 22.6% | -- | -- | 5 | ₹13,995 | Exit load of 1%, if redeemed within 365 days. |
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Value Research rates equity mutual funds by taking into account a variety of factors. These include returns of the funds over three and five years along with the risk taken to achieve such returns, history of the fund, etc. In simple words, scores are assigned for how risky a fund is and how much return it gives. These scores are then combined to determine the final star rating. Value Research only rates mutual funds that have been operational for at least three years, have at least 10 funds in their group and have not undergone significant changes in recent years.
Estimate your returns on mutual funds investment with SIP calculator. It is an easy-to-use tool that allows investors to assess probable returns on SIP.
Since equity mutual fund portfolios comprise at least 65% equity and equity-oriented securities, these are well-suited for investors seeking capital appreciation through a diversified portfolio of stocks. Investors who are comfortable with a moderate to high level of risk and are looking for potential higher returns may find these funds aligned with their investment objectives. Equity mutual funds are best suited for:
a) Investors with Moderate to High-Risk Appetite
Equity mutual funds tend to have high to moderate risk levels. Even the top rated equity mutual funds may see price fluctuations and volatility in the short term. Therefore, if you are an investor who has a moderate to high-risk appetite, then these funds may be suitable for you.
b) Investors Who Want to Start Small in Equity Investments
Many investors want to invest in the equity market but are unable to because they may either not have enough capital Through equity mutual funds, such investors can start small - even with an amount as low as Rs. 100.
c) Investors Who Want to Save Taxes and Enhance Overall Wealth
Equity funds, especially ELSS Funds are useful for investors who want to avail the combined benefits of tax-saving and long-term wealth creation. They allow investors to save taxes through the tax-saving benefits of Section 80C of the Income Tax Act. An investor can reduce his/her taxable income by Rs. 1.5 lakhs with investments in equity mutual funds. Equity mutual funds also offer the potential of earning positive long-term returns from investments.
d) Long-Term Investors
Equity mutual funds are well-suited for long-term investors because although their returns can be volatile in the short term, they typically have the potential to deliver favorable results over an extended period. This longer horizon allows investors to ride out market fluctuations and benefit from the potential growth of the underlying stocks in the portfolio.
e) Investors Who are New to Stock Investing
Many investors want to invest in the stock market but are unable to do so because they do not have the required market knowledge to pick appropriate stocks.
Equity mutual funds offer new investors an opportunity to gain exposure to stocks. With equity mutual funds, investors can rely on professional and experienced fund managers to pick stocks for them.
Before investing in any of the best rated equity mutual funds to invest in 2025, an investor must keep the following factors in mind:
When considering the best-rated equity mutual funds for investment, you must scrutinize the fund's track record, focusing on its historical performance over different time periods. Look for a consistent and positive track record as it reflects the fund's ability to navigate various market scenarios and deliver reliable returns.
Consider the fund’s objective and evaluate whether it aligns with your personal investment goals. Understanding the fund's intended purpose and risk profile is crucial for making informed investment decisions in pursuit of long-term financial objectives.
The expense ratio is the fee charged by the fund house to manage your investments. The lower the expense ratio, the fewer expenses you will incur on your investments. Therefore, while searching for the best equity mutual funds in 2025, you will have to look out for a fund house that offers reasonable fees and charges over your investments.
An equity fund may not perform well solely based on market directions. It is also dependent on the fund manager’s expertise. A fund manager’s track record, experience and expertise can play an important role in the fund’s performance. Checking up on the history, performance, and expertise of the fund manager allows you to gauge the fund’s capability to generate positive returns.
Some of the benefits that investors can avail by investing in best equity mutual funds are:
Optimal for investors with smaller budgets, top-rated equity mutual funds allow individuals to enter the stock market with modest amounts, promoting accessibility and inclusion.
Equity mutual funds facilitate portfolio diversification by spreading investments across a variety of stocks. This minimizes the impact of poor-performing assets and contributes to a more resilient investment strategy.
Investing in these funds is convenient as they provide professional management, eliminating the need for individual stock selection and monitoring. This convenience is particularly beneficial for investors with limited time or expertise.
The diversified nature of equity mutual funds helps mitigate risk by reducing the impact of volatility in individual stocks. This approach enhances overall portfolio stability and lowers the vulnerability to market fluctuations.
Equity mutual funds fall under regulatory frameworks. This ensures a level of transparency, security, and compliance. Regulatory oversight provides investors with confidence and trust in the management and operation of these funds.
As already stated, investments in equity mutual funds involve risks in the short term; the risks can be of the following kinds:
a) Market Risk: A market risk results in losses for any investor because of poor performance of the market. These can be inflation, deflation, political unrest, interest fluctuations, and more.
b) Interest Rate Risk: Interest rate changes depending on the credit available to lenders and the demand from borrowers. An increase in the interest rate during the investment period can result in a reduction in the price of the security, which means it is inversely related to each other.
c) Liquidity Risk: Liquidity risk is the difficulty of redeeming an investment without facing a loss in the value of the fund. This occurs for several reasons, like interest rates increase, changes in the value of currency, and more. Therefore, selling the funds and arranging money can sometimes be hard.
The tenure you need to stay invested in entirely depends on the objective of your investment. Typically, equity funds are open-ended, which provides you with the opportunity to sell the fund when you want to. However, it is advised to stay invested if you can see steady returns in the future.
Mutual funds are known to provide higher returns than bank FDs (when it is the right fund). Therefore, you can expect returns of more than 13%.
You can stay invested in an equity mutual fund for long or short term, based on your financial goals. But, it is advised to stay invested for the long term to see positive returns.
There are different kinds of equity mutual funds, but the suitability of an equity mutual fund will be based on your financial and investment goals, risk appetite, and several other factors.
In certain cases, an equity mutual fund can occasionally give you dividends and bonuses from the underlying companies it was invested in.
Disclaimer: Mutual Fund Investment are subjected to market risks, read all the scheme related documents carefully before investing. Mutual Funds are not Exchange traded product and Next Billion Technology Pvt Ltd facilitates investment in Mutual Fund through BSE Star Platform. Dispute w.r.t in Mutual Fund through our platform would have access to Exchange investor redressal forum or Arbitration mechanism.
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Research Analyst - Aakash Baid
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The Bandhan Small Cap Fund has given 32.17% annualized returns in the past three years and 24.64% in the last 5 years. The Bandhan Small Cap Fund comes under the Equity category of IDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Bandhan Small Cap Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹20,129Cr |
| 1Y Returns | 15.1% |
Fund Performance: The Parag Parikh Flexi Cap Fund has given 17.64% annualized returns in the past three years and 16.8% in the last 5 years. The Parag Parikh Flexi Cap Fund comes under the Equity category of PPFAS Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Parag Parikh Flexi Cap Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,28,966Cr |
| 1Y Returns | 4.4% |
Fund Performance: The HDFC Mid Cap Fund has given 24.36% annualized returns in the past three years and 22.07% in the last 5 years. The HDFC Mid Cap Fund comes under the Equity category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Mid Cap Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹85,357Cr |
| 1Y Returns | 11.4% |
Fund Performance: The Motilal Oswal Midcap Fund has given 22.08% annualized returns in the past three years and 24.12% in the last 5 years. The Motilal Oswal Midcap Fund comes under the Equity category of Motilal Oswal Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Motilal Oswal Midcap Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹31,046Cr |
| 1Y Returns | -3.0% |
Fund Performance: The Nippon India Small Cap Fund has given 22.04% annualized returns in the past three years and 23.35% in the last 5 years. The Nippon India Small Cap Fund comes under the Equity category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹61,808Cr |
| 1Y Returns | 11.2% |
Fund Performance: The HDFC Flexi Cap Direct Plan-Growth has given 19.55% annualized returns in the past three years and 20.32% in the last 5 years. The HDFC Flexi Cap Direct Plan-Growth comes under the Equity category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Flexi Cap Direct Plan-Growth via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹91,334Cr |
| 1Y Returns | 1.9% |
Fund Performance: The Quant Small Cap Fund has given 21.27% annualized returns in the past three years and 23.31% in the last 5 years. The Quant Small Cap Fund comes under the Equity category of Quant Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Quant Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹25,820Cr |
| 1Y Returns | 9.4% |
Fund Performance: The SBI PSU Direct Plan-Growth has given 32.2% annualized returns in the past three years and 28.29% in the last 5 years. The SBI PSU Direct Plan-Growth comes under the Equity category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI PSU Direct Plan-Growth via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹5,891Cr |
| 1Y Returns | 17.6% |
Fund Performance: The Nippon India Large Cap Fund has given 17.15% annualized returns in the past three years and 18.07% in the last 5 years. The Nippon India Large Cap Fund comes under the Equity category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Large Cap Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹46,520Cr |
| 1Y Returns | 3.9% |
Fund Performance: The Motilal Oswal BSE Enhanced Value Index Fund comes under the Equity category of Motilal Oswal Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Motilal Oswal BSE Enhanced Value Index Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹1,570Cr |
| 1Y Returns | 19.5% |
Fund Performance: The Edelweiss US Technology Equity FoF Direct-Growth has given 35.68% annualized returns in the past three years and 14.61% in the last 5 years. The Edelweiss US Technology Equity FoF Direct-Growth comes under the Equity category of Edelweiss Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Edelweiss US Technology Equity FoF Direct-Growth via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹3,255Cr |
| 1Y Returns | 51.1% |
Fund Performance: The Nippon India Growth Mid Cap Fund has given 26.45% annualized returns in the past three years and 23.21% in the last 5 years. The Nippon India Growth Mid Cap Fund comes under the Equity category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Growth Mid Cap Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹39,676Cr |
| 1Y Returns | 13.2% |
Fund Performance: The UTI Nifty 50 Index Fund has given 10.93% annualized returns in the past three years and 11.43% in the last 5 years. The UTI Nifty 50 Index Fund comes under the Equity category of UTI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in UTI Nifty 50 Index Fund via lump sum is ₹1,000 and via SIP is ₹500.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹24,433Cr |
| 1Y Returns | -0.5% |
Fund Performance: The Aditya Birla Sun Life PSU Equity Fund has given 29.81% annualized returns in the past three years and 28.47% in the last 5 years. The Aditya Birla Sun Life PSU Equity Fund comes under the Equity category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life PSU Equity Fund via lump sum is ₹500 and via SIP is ₹100.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹5,334Cr |
| 1Y Returns | 17.6% |
Fund Performance: The Motilal Oswal Large and Midcap Fund has given 27.05% annualized returns in the past three years and 22.61% in the last 5 years. The Motilal Oswal Large and Midcap Fund comes under the Equity category of Motilal Oswal Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Motilal Oswal Large and Midcap Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹13,995Cr |
| 1Y Returns | 16.8% |
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