Top 5 mutual funds with highest 5-year returns: Here’s how their strategies differ

Equity mutual funds invest primarily in stocks across large-cap, mid-cap, and small-cap segments, spanning different sectors and industries. Several equity funds have delivered strong returns over the past five years, even through periods of market uncertainty and fluctuations.

So, let’s take a look at the top five performing diversified equity funds.

If you had invested ₹1 lakh as a lump sum in the Motilal Oswal Midcap Fund, your investment would have grown to approximately ₹2.8 lakh over the last five years, reflecting its long-term growth potential.

Based on this data, it is clear that mid-cap and small-cap funds dominate the list, highlighting their strong return potential despite higher volatility.

How these top 5 funds differ?

A closer look at the top-performing diversified equity mutual funds reveals a clear pattern of differentiated strategy.

Motilal Oswal Mid Cap Fund

This mid-cap fund has highly concentrated mid-cap positioning, with 80.86% allocation to mid-cap stocks. Large-cap exposure is 19.14% with no small-cap holdings. The fund remains invested in equities at 93.37%, with 6.63% in cash holdings.

Invesco India Smallcap Fund

With 66.45% exposure to small-cap stocks, it clearly prioritizes early-stage and high-growth companies.

The fund is also nearly fully invested in equities at 98.91%, leaving very little in cash at 1.09%. Its top 3 holdings include Sai Life Sciences, Amber Enterprises, and Aditya Infotech.

Invesco India Mid Cap Fund

This mid-cap fund presents a relatively more balanced structure within the mid-cap category.

While mid-caps still dominate at 64.90%, the fund maintains a more diversified cap mix with 18.14% in large caps and 16.96% in small caps, making it less concentrated than the Motilal Oswal Mid Cap Fund. Key holdings of this fund are BSE, Prestige Estates, and Federal Bank.

Bandhan Small Cap Fund

Bandhan Small Cap Fund combines aggressive small-cap positioning with a slightly more defensive structural buffer.

While 77.12% of assets are in small-cap stocks, the fund also maintains a comparatively higher 10.12% cash allocation. Its top holdings are Sobha, REC, and SBI.

Nippon India Growth Mid Cap Fund

This mid-cap fund reflects a more balanced mid-cap strategy compared to the highly concentrated Motilal Oswal approach.

With 68.50% allocation to mid-caps, it maintains a stronger presence in large-cap stocks at 21.09%, and a smaller but notable 10.41% exposure to small caps. Its near-complete equity allocation of 99.01% signals higher market participation. The top holdings include BSE, Fortis Healthcare, and Federal Bank.

Disclaimer: This is purely for educational/ informational purposes and should not be taken as any investment advice. Always consult a SEBI-registered advisor before making any investment decisions.