mutual funds
Best Equity Funds in India to invest in 2025
Equity Mutual Funds are one of the most preferred forms of investments made by investors these days. Equity Funds generate returns by investing in stocks of publicly listed companies across various market capitalizations. According to SEBI mandate, a mutual fund must invest at least 65% of the funds in equity securities, while 35% of the funds can be invested in money-market or debt instruments. The selection depends on the skill of the fund manager who distributes the fund accordingly using his expertise The returns generated by Equity funds are dependent on various factors such as market performance, portfolio composition (how much % of equity is allotted), investment horizon, and risk level.
The process to identify the best-performing equity funds includes evaluating factors such as:
- Historical returns over multiple timeframes
- Risk-adjusted performance (Sharpe ratio, standard deviation)
- Consistency of fund manager and strategy
- Star ratings by reputed agencies (5-star being the highest)
We have included funds that have a minimum track record of 3 years and haven’t undergone major portfolio or fund manager changes recently.
Top Equity Mutual Funds in India – 2025
| Fund Name | Category | 1M Return | 1Y Return | 5Y Return |
|---|---|---|---|---|
| Axis Bluechip Fund | Large Cap | 3.09% | 22.04% | 19.05% |
| Mirae Asset Large Cap Fund | Large Cap | 3.03% | 24.73% | 17.14% |
| Parag Parikh Flexi Cap Fund | Flexi Cap | 5.22% | 25.47% | 21.84% |
| UTI Flexi Cap Fund | Flexi Cap | 4.74% | 26.07% | 19.17% |
| Axis Midcap Fund | Mid Cap | 5.67% | 27.43% | 23.34% |
| Kotak Emerging Equity Fund | Small Cap | 7.30% | 34.40% | 26.23% |
| Axis Small Cap Fund | Small Cap | 6.57% | 32.50% | 25.01% |
| SBI Small Cap Fund | Small Cap | 6.24% | 31.84% | 23.99% |
| SBI Equity Hybrid Fund | Equity Hybrid | 2.72% | 18.54% | 14.31% |
| Mirae Asset Hybrid Equity Fund | Equity Hybrid | 2.24% | 19.70% | 13.80% |
Key Takeaways
- Large Cap Funds are ideal for conservative investors looking for stability and moderate growth.
- Flexi Cap and Mid Cap Funds offer a balance of risk and return, suitable for medium to long-term horizons.
- Small Cap Funds deliver high growth potential but come with higher volatility. Best suited for aggressive investors.
- Equity Hybrid Funds combine equity and debt exposure, offering lower risk and moderate returns.
Who can invest in Equity Mutual Funds?
Since equity funds invest in Equity markets, they are well-suited for investors who are willing to take risk and looking for higher returns can invest in Equity Mutual Funds.
- Investors with risk appetite
Equity funds tend to have some risk associated with it. Even the best of equity funds may occasionally face a dip due to market conditions. Therefore, as an investor with a good risk appetite, these funds may be suitable for you
- Investors who want to start small
Investors who wish to explore equity markets can do so at a minimal cost of even Rs. 500 per month
- Investors looking for tax benefits
ELSS offers tax-benefits as well as long-term wealth creation. They allow investors to save tax upto Rs. 1.5 Lakhs through Section 80C of IT act
- Long term investors
Equity Funds are suited for long-term investors although their returns can be volatile in the shorter run. The longer horizon allows the investors to ride out market fluctuations and benefit from the underlying stocks
What should you consider while investing in Mutual funds?
Before beginning to invest in best equity mutual funds of 2024, you must keep the following factors in mind
- Track record of the fund
Before beginning to invest in the fund, you must analyze the fund’s track record, focusing on its historical performance over different time period. Doing so, will give you the ability to check the fund’s ablility to navigate all kinds of market scenarios
- Objective of the fund
Consider the fund’s objective and check whether it aligns with your personal goal. Understanding the fund’s purpose and its risk profile is important for making informed investment decision over a long term horizon
- Expense Ratio
The expense ratio is a percentage charged by fund house to manage your investments. The lower the expense ratio, the fewer expenses you can incur on investments. While searching for the fund house, look for a fund houses that has a lower expense ratio
- Fund Manager’s expertise
A Fund manager’s job is the most important as he is the one that is going to manage your investments. A fund won’t perform just based on market conditions. Checking Fund Manager’s expertise allows you to gauge the fund’s ability to generate positive earnings.
Advantages of Investing in Equity Mutual Funds
- Customizable investment
Whether you want to go for a large investment or small investment, whether you are willing to invest lump sum or go as an SIP, you can do so according to your convenience
- Portfolio Diversification
Equity Mutual Funds facilitate fund diversification by spreading your investment across diverse portfolios. Spreading your investment across different investment mitigates risk and help you navigate all kinds of market conditions
- Professional Management
Investing in these equity mutual funds is convenient as they come with professional fund management, eliminating the need for individual attention
- Risk Mitigation
The diversification associated with equity mutual funds helps minimize risk as they compensate for poorly performing assets with good ones, thus maintaining portfolio stability
- Regulation
Equity Mutual fund fall under regulatory framework. It ensures transparency, security, and compliance. Regulatory bodies increases the confidence level of investors
