Best Equity Funds in India 2026
Equity Mutual Funds are investment options where most of the money is invested in shares of companies listed on stock exchanges. The main objective of these funds is to increase wealth over the long term by benefiting from business growth.
Considering the Right Equity Fund: Key Points to Remember
- Don’t solely trust the reputation of the fund manager: Experience does matter, but it should not be the only basis for your choice.
- Be aligned with personal aspirations and risk appetite: Choose a fund that meets your financial aspirations and is in line with your comfort level of risk in the market.
- Understand market cycles and themes: Make sure the fund invests in sectors or themes that you believe will appreciate in the foreseeable future.
- Look at the fund's underlying companies: Assess the performance, solidness and long-term growing potential of the stocks in the fund.
- Weigh the risk-return trade-off: Compare what you may gain compared to what gain the fund exposes you to.
- Evaluate the fund manager's past: Look at several cycles of performance to determine consistent performance.
- Look at the fees, costs incurred, and size of the fund: Their costs impact on your returns; if the fund is large, you may be in good company.
- Correctly understand the NAV: It indicates the unit price of a single fund or scheme and doesn't mean good fund performance.
- Understand the NAV as a reference point for entry: It serves to compare the cost of when you buy, but doesn't define the fund's positive outcome.
- Assess the funds' longer metrics: Highlight figures that tell you more about the funds' performance - CAGR, Sharpe ratio, rolling returns.
Top 10 Large Cap Equity Funds
Large cap mutual funds invest in large cap companies in the 100 largest companies by market cap. Thus, the returns can be stable and moderate.
- Who Should Invest: Large cap mutual funds are a good option for investors with a long-term horizon of 5 years or more, who prefer stability over returns. Investors looking for stability and consistent performance and have a low risk tolerance or who want the best protection against large capital losses should invest in large cap mutual funds.
- Top Advantages: They have less risk than medium cap and small cap mutual funds, they have good liquidity for entry and exit, and they provide good diversification by investing in many different sectors.
- Investment Choice: There is the option of investing via both SIP and lump sum.
- Risks: While investing in large cap mutual funds will tend to be stable, large cap mutual funds will still face more or less volatility, market risk, liquidity risk, and interest rate risk.
The table below shows the 10 Large Cap Equity Funds:
Fund Name | 3-Year Returns | 5-Year Returns |
ICICI Prudential BHARAT 22 FOF Direct Growth | 29.12% | 32.14% |
Nippon India Large Cap Fund Direct Growth | 22.39% | 25.65% |
ICICI Prudential Bluechip Fund Direct Growth | 22.26% | 24.70% |
DSP Large Cap Fund Direct Growth | 20.96% | 20.25% |
ICICI Prudential Large Cap Fund Direct Growth | 20.49% | 22.52% |
HDFC Large Cap Fund Direct Growth | 19.16% | 22.04% |
DSP Nifty 50 Equal Weight Index Fund Direct Growth | 18.66% | 23.66% |
Kotak Bluechip Fund Direct Growth | 21.27% | 22.96% |
Aditya Birla Sun Life Frontline Equity Direct Fund Growth | 21.09% | 22.72% |
Mahindra Manulife Large Cap Fund Direct Growth | 20.58% | 22.40% |
* Data accurate as on 28 July 2025
- ICICI Prudential BHARAT 22 FOF Direct Growth
The fund is designed to track the BHARAT 22 index and offers an opportunity to invest in a diversified portfolio of public sector enterprises. The fund has provided 29.12% annualised returns over the past 3 years and 32.14% over the last 5 years, indicating a very strong long-term return. It is part of the ICICI Prudential Equity mutual fund offering. Minimum Investment: Rs.5,000 (lump sum) and Rs.1000 (SIP).
- Nippon India Large Cap Fund Direct Growth
The fund is a well-established large-cap equity fund, and it invests in markets leaders across sectors. It has provided returns of 22.39% over the past 3 years and has a 5-year annualised return of 25.65%, showing reliability during volatile market trends. Minimum Investment: Rs.100 (lump sum & SIP).
- ICICI Prudential Bluechip Fund Direct Growth
The fund is to target fundamentally good companies selected from the Nifty 100. The fund's 3-year annualized return is 22.26% and will provide a 5-year annualized return of 24.70%, indicating stability. It is an equity fund best suited for investors seeking large-cap exposure with moderate risk. Minimum Investment: Rs.100 (lump sum & SIP).
- DSP Large Cap Fund Direct Growth
The fund is to invest in quality large-cap companies and has provided a return of 20.96% over the last 3 years and 20.25% over the last 5 years. The fund has a good balanced sector allocation in its portfolio, making it a consideration for conservative equity investors. Minimum Investment: Rs.100 (lump sum & SIP).
- ICICI Prudential Large Cap Fund Direct Growth
Focusing on the top 100 stocks listed by market capitalisation, this fund has returned 20.49% (3Y) and 22.52% (5Y) annualised. It offers a steady growth option for someone investing within the equity category. Minimum Investment: Rs.100 (lump sum & SIP).
- HDFC Large Cap Fund Direct Growth
Known for a consistent conservative style, this fund looks at big-ticket companies with strong fundamentals. It has produced 19.16% in 3 years and 22.04% in 5 years and is a fund tailor-made for investors with a long-term investment horizon looking to steadily grow their investments. Minimum Investment: Rs.100 (lump sum & SIP).
- DSP Nifty 50 Equal Weight Index Fund Direct Growth
In this index fund, all 50 stocks are assigned an equal weight reducing concentration risk. It has produced 18.66% (3Y) and 23.66% (5Y) returns. This option appeals to passive investors looking for broad-based exposure to the indices. Minimum Investment: Rs.100 (lump sum & SIP).
- Kotak Bluechip Fund Direct Growth
Focusing on fundamentally strong large-cap equities, Kotak Bluechip Fund Direct Growth has given returns of 21.27% (3Y) and 22.96% (5Y). As the name suggests, the scheme has a quality focus and a sustainable long-term approach. Minimum Investment: Rs.100 (lump sum & SIP).
- Aditya Birla Sun Life Frontline Equity Direct Growth
This large-cap scheme follows a bottom-up approach to stock selection. Hence, returns of 21.09% (3Y) and 22.72% (5Y) are given. It is well known for the stability of its portfolios and long-term performance. Minimum Investment: Rs.100 (lump sum & SIP).
- Mahindra Manulife Large Cap Fund Direct Growth
This has invested in the leading large-cap companies in the market, which has resulted in returns of 20.58% (3Y) and 22.40% (5Y). It should be appealing to long-term SIP investors because of the portfolio's quality names and growth prospects. Minimum Investment: Rs.1,000 (lump sum) and Rs.500 (SIP).
Top 10 Mid Cap Equity Funds
Mid cap mutual funds invest in companies that are larger than small‑caps but have not yet reached large‑cap status. They offer higher growth potential than large‑caps, but returns can be more volatile.
- Who Should Invest: Investors with a long‑term horizon of at least five years, who are willing to accept higher volatility for stronger returns, and who have a moderate to high risk tolerance.
- Top Advantages: Mid‑cap funds can outperform large‑caps over time, provide diversification across emerging companies, and deliver significant wealth creation potential if held rightly.
- Investment Choice: Eligible for both Systematic Investment Plan (SIP) and lump sum investments, with low minimum entry requirements for most schemes.
- Risks: These funds carry very high risk, greater volatility, liquidity risk during downturns, and are more sensitive to economic cycles.
Fund Name | 3‑Year Returns p.a. | 5‑Year Returns p.a. |
Motilal Oswal Midcap Fund Direct Growth | 30.81 % | 36.81 % |
HDFC Mid Cap Fund Direct Growth | 28.76 % | 32.58 % |
Edelweiss Mid Cap Direct Plan Growth | 27.65 % | 33.36 % |
Nippon India Growth Mid Cap Fund Direct Growth | 27.51 % | 32.45 % |
Invesco India Mid Cap Fund Direct Growth | 30.61 % | 31.48 % |
Mahindra Manulife Mid Cap Fund Direct Growth | 31.72 % | 32.03 % |
Kotak Midcap Fund Direct Growth | 24.64 % | 31.25 % |
SBI Magnum Mid Cap Direct Plan Growth | 24.11 % | 30.57 % |
Sundaram Mid Cap Fund Direct Growth | 25.92 % | 29.61 % |
SBI Mid Cap Direct Plan Growth | 19.04 % | 28.83 % |
Data accurate as on 31 July 2025
Fund Highlights
- Motilal Oswal Midcap Fund Direct Growth
This fund has delivered exceptional returns: 30.81 per cent (3Y) and 36.81 per cent (5Y), significantly outperforming peers. Minimum investment is Rs.500 for both SIP and lump sum, with an AUM of about Rs.33,053 crore. This fund is known for superior SIP performance among mid‑caps.
- HDFC Mid Cap Fund Direct Growth
A consistent performer with 28.76 per cent (3Y) and 32.58 per cent (5Y) returns. It is accessible with a minimum of Rs.100 for both SIP and lump sum. It benefits from disciplined stock selection and strong fund management integrity.
- Edelweiss Mid Cap Direct Plan Growth
Has provided 27.65 per cent over three years and 33.36 per cent over five, making it a robust choice. Minimum investment required is Rs.100. It is rated high for risk but has delivered stable SIP returns among mid‑cap funds.
- Nippon India Growth Mid Cap Fund Direct Growth
Offers 27.51 per cent (3Y) and 32.45 per cent (5Y). Very low entry requirement: Rs.100 for both SIP and lump sum. A well‑recognized fund with strong fund size (AUM Rs.39,065 crore), which supports liquidity and reliability.
- Invesco India Mid Cap Fund Direct Growth
Reports 30.61 per cent (3Y) and 31.48 per cent (5Y). The SIP minimum is Rs.500, lump sum Rs.1,000. AUM Rs.7,405 crore. A consistently high performer ranked among mid‑caps delivering over 25 per cent XIRR on SIPs.
- Mahindra Manulife Mid Cap Fund Direct Growth
Produces 31.72 per cent (3Y) and 32.03 per cent (5Y). SIP minimum is Rs.500; lump sum Rs.1,000. AUM Rs.3,775 crore. Strong growth outlook and attractive for long‑term investors focused on mid‑cap themes.
- Kotak Midcap Fund Direct Growth
Delivers steady returns of 24.64 per cent (3Y) and 31.25 per cent (5Y). It has low minimum investment (Rs.100). AUM Rs.57,101 crore ensures deep liquidity. Suitable for conservative mid‑cap exposure.
- SBI Magnum Mid Cap Direct Plan Growth
Offers 24.11 per cent (3Y) and 30.57 per cent (5Y). Entry level Rs.500 for SIP and Rs.5,000 lump sum. AUM Rs.22,406 crore. Known for cautious portfolio positioning within mid‑cap space.
- Sundaram Mid Cap Fund Direct Growth
Yields 25.92 per cent (3Y) and 29.61 per cent (5Y). Very low investment threshold at Rs.100. AUM Rs.12,818 crore. A mid‑cap fund that balances growth with diversification, appealing to moderately risk‑aware investors.
- SBI Mid Cap Direct Plan Growth
More conservative: 19.04 per cent (3Y) and 28.83 per cent (5Y). Requires Rs.500 SIP or Rs.5,000 lump sum. AUM Rs.23,269 crore. Better suited to risk‑aware investors seeking mid‑cap exposure with some stability.
Top 10 Small‑Cap Equity Funds
Small‑cap mutual funds invest predominantly in small companies (usually those with market capitalisation under Rs. 5,000 crore). They offer high growth potential but also come with very high volatility.
- Who Should Invest: Investors with a long‑term horizon of at least five to six years who have a high risk appetite and can tolerate sharp ups and downs in performance.
- Top Advantages: Potential for significantly higher returns compared to mid‑cap and large‑cap funds, ability to diversify across nascent companies, and strong compounding benefits in favourable market cycles.
- Investment Choice: Most schemes allow both SIP and lump sum investments. SIP minimums can start as low as Rs. 100, and lump sum minimums vary by fund.
- Risks: These funds carry very high risk, marked by extreme volatility, low liquidity in smaller stocks and vulnerability during economic downturns. They are best suited only for experienced investors.
Fund Name | 3‑Year Returns p.a. | 5‑Year Returns p.a. |
Bandhan Small Cap Fund Direct Growth | 33.84 % | 37.09 % |
Invesco India Smallcap Fund Direct Growth | 28.74 % | 34.68 % |
Nippon India Small Cap Fund Direct Growth | 27 % | 37.70 % |
Franklin India Smaller Companies Fund | 29.90 % | 35.24 % |
Quant Small Cap Fund Direct Plan Growth | 28.95 % | 41.40 % |
Tata Small Cap Fund Direct Growth | 27.24 % | 35.24 % |
Franklin India Small Cap Fund Direct Growth | 26.71 % | 34.39 % |
Edelweiss Small Cap Fund Direct Growth | 24.34 % | 34.75 % |
ITI Small Cap Fund Direct Growth | 31.20 % | 30.32 % |
HDFC Small Cap Fund Direct Growth | 27.12 % | 34.63 % |
Data accurate as on 31 July 2025.
Fund Highlights
- Bandhan Small Cap Fund Direct Growth
Has returned approximately 33.84 per cent over three years and around 37.09 per cent over five years. Minimum SIP investment is Rs. 100; lump sum starts at Rs. 1,000. Fund size is about Rs. 12,981 crore.
- Invesco India Smallcap Fund Direct Growth
Delivers around 28.74 per cent (3Y) and 34.68 per cent (5Y). SIP starts at Rs. 500; lump sum Rs. 1,000. AUM approx. Rs. 7,424 crore.
- Nippon India Small Cap Fund Direct Growth
Reports circa 27 per cent (3Y) and about 37.70 per cent (5Y). SIP minimum is Rs. 100; lump sum Rs. 5,000. One of the largest small‐cap schemes with AUm Rs. 66,601 crore.
- Franklin India Smaller Companies Fund Direct Growth
Delivered roughly 29.90 per cent over three years and 35.24 per cent over five years. SIP minimum Rs. 500; lump sum Rs. 5,000. AUM approx. Rs. 13,544 crore.
- Quant Small Cap Fund Direct Plan Growth
Returns of around 28.95 per cent (3Y) and an outstanding 41.40 per cent (5Y). SIP starts at Rs. 1,000; lump sum Rs. 5,000. AUM Rs. 29,629 crore.
- Tata Small Cap Fund Direct Growth
Approximately 27.24 per cent (3Y) and 35.24 per cent (5Y). SIP from Rs. 100; lump sum Rs. 5,000. AUM Rs. 11,163 crore.
- Franklin India Small Cap Fund Direct Growth
Recorded around 26.71 per cent (3Y) and 34.39 per cent (5Y). SIP minimum Rs. 500; lump sum Rs. 5,000. AUM Rs. 13,995 crore.
- Edelweiss Small Cap Fund Direct Growth
Delivers approximately 24.34 per cent over three years and 34.75 per cent over five. SIP and lump sum minimums both Rs. 100. AUM Rs. 4,929 crore.
- ITI Small Cap Fund Direct Growth
Strong 3‑year return 31.20 per cent and about 30.32 per cent over five years. SIP starts at Rs. 500; lump sum Rs. 5,000. AUM ~Rs. 10,737 crore.
- HDFC Small Cap Fund Direct Growth
Returns of around 27.12 per cent (3Y) and 34.63 per cent (5Y). SIP and lump sum minimums both Rs. 100. AUM is approximately Rs. 35,780 crore.
ELSS (Equity Linked Savings Scheme)
ELSS (Equity Linked Savings Scheme) mutual funds offer tax savings under Section 80C with a mandatory three-year lock‑in period and equity exposure, making them suitable for long‑term investors seeking tax efficiency and growth.
- Who Should Invest: Investors looking to save tax, ready to stay invested for at least three years or more, and comfortable with high equity volatility and market risk.
- Top Advantages: Offers tax deduction up to Rs. 1.5 lakh under Section 80C, shortest lock‑in among tax‑saving options, and potential for strong long‑term returns aligned with equity markets.
- Investment Choice: Both lump sum and SIP investments are supported, typically with minimums starting at Rs. 500.
- Risks: ELSS schemes carry very high risk due to equity exposure and are subject to market volatility; withdrawals are not allowed before three years.
Fund Name | 3‑Year Returns p.a. | 5‑Year Returns p.a. |
SBI Long Term Equity Fund Direct Growth | 30.65 % | 29.03 % |
SBI ELSS Tax Saver Fund Direct Growth | 26.34 % | 26.86 % |
HDFC ELSS Tax Saver Fund Direct Growth | 23.68 % | 26.47 % |
Parag Parikh ELSS Tax Saver Fund Direct Growth | 21.03 % | 24.46 % |
Motilal Oswal ELSS Tax Saver Fund Direct Growth | 28.73 % | 28.15 % |
ITI ELSS Tax Saver Fund Direct Growth | 28.60 % | 24.42 % |
JM ELSS Tax Saver Fund Direct Growth | 22.01 % | 25.15 % |
Franklin India ELSS Tax Saver Fund Direct Growth | 21.70 % | 25.96 % |
DSP ELSS Tax Saver Fund Direct Growth | 21.53 % | 25.45 % |
Quant ELSS Tax Saver Fund Direct Growth | 18.86 % | 31.39 % |
Data accurate as on 31 July 2025.
Fund Highlights
- SBI Long Term Equity Fund Direct Growth
This is a popular ELSS choice, offering 30.65 per cent over three years and 29.03 per cent over five. The minimum investment is Rs. 500 for both SIP and lump sum, with an AUM of around Rs. 29,667 crore and high liquidity.
- SBI ELSS Tax Saver Fund Direct Growth
Provides consistent returns of 26.34 per cent (3Y) and 26.86 per cent (5Y). Requires Rs. 500 minimum investment. AUM stands at approximately Rs. 30,616 crore, making it one of the largest ELSS schemes.
- HDFC ELSS Tax Saver Fund Direct Growth
Delivers 23.68 per cent (3Y) and 26.47 per cent (5Y). SIP and lump sum minimum is Rs. 500. Known for disciplined fund management and solid performance.
- Parag Parikh ELSS Tax Saver Fund Direct Growth
Offers 21.03 per cent over three years and 24.46 per cent over five. Minimum lump sum Rs. 500 and SIP Rs. 1,000. Known for its diversified global-equity exposure.
- Motilal Oswal ELSS Tax Saver Fund Direct Growth
High 3-year return of 28.73 per cent and 28.15 per cent over five. Requires Rs. 500 minimum investment. Mid-size AUM (Rs. 4,505 crore) and strong equity allocation.
- ITI ELSS Tax Saver Fund Direct Growth
Records 28.60 per cent (3Y) and 24.42 per cent (5Y). SIP and lump sum minimum each Rs. 500. Smaller AUM (Rs. 418 crore) with a high-risk profile.
- JM ELSS Tax Saver Fund Direct Growth
Returned 22.01 per cent (3Y) and 25.15 per cent (5Y). Requires Rs. 500 minimum investment. Low AUM (Rs. 208 crore), making it a leaner but focused ELSS fund.
- Franklin India ELSS Tax Saver Fund Direct Growth
Delivers 21.70 per cent (3Y) and 25.96 per cent (5Y). Minimum of Rs. 500 for both SIP and lump sum. AUM Rs. 6,883 crore, with consistent historical performance.
- DSP ELSS Tax Saver Fund Direct Growth
Offers 21.53 per cent (3Y) and 25.45 per cent (5Y). SIP and lump sum minimum Rs. 500. Large AUM (Rs. 17,427 crore), supportive of liquidity and scale.
- Quant ELSS Tax Saver Fund Direct Growth
Delivers modest 18.86 per cent over three years but an exceptional 31.39 per cent over five years. Minimum Rs. 500 investment. AUM Rs. 11,922 crore and high risk rating.
FAQs on Best Equity Funds
- Who should invest in equity funds?
They are suitable for investors with a medium to high risk appetite who can stay invested for at least 5 years. These funds can help build long-term wealth but require patience and tolerance for market volatility.
- Are equity mutual funds risky?
Yes, equity funds carry risks such as market swings, economic slowdowns, and company-specific developments. Although risk is inherent, it can be reduced through diversification and a long investment horizon.
- How are equity mutual funds taxed?
If held for over 1 year, gains above Rs.1 lakh annually are taxed at 10%. For holdings under 1 year, gains are taxed at 15%, regardless of the amount. Dividends are also taxed in the hands of investors as per income slab.
- Which is better: SIP or lump sum?
SIP is ideal for salaried or cautious investors since it helps spread investments and average out market highs and lows. Lump sum investments can work when markets are down or when deploying idle funds.
- How do I choose the right equity fund?
Look for consistent long-term performance, a low expense ratio, an experienced fund manager, and alignment with your goals. Don’t chase recent returns alone. Consider past volatility and fund house reputation too.
- Can I lose money in equity mutual funds?
Yes, losses can occur, especially in the short term due to market declines. However, staying invested over a longer period often helps recover losses and earn positive returns through market cycles.
- Are equity funds better than fixed deposits?
Equity funds offer higher potential returns but are riskier than fixed deposits, which provide safety and guaranteed returns. Your choice depends on whether you prioritise wealth growth or capital preservation.
- How often should I review my equity fund investments?
A half-yearly or annual review is recommended. Reassess your funds if there’s major underperformance, a change in fund strategy, or when your financial goals or market conditions change significantly.
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