Best-Performing Mutual Funds in the Last One Year

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Choosing the best mutual fund isn’t as simple as picking the fund with the highest return. The right mutual fund depends on your financial goals, investment horizon, and risk appetite.

 

For example, an investor looking to build long-term wealth may choose an Equity Fund, while someone seeking stability may prefer debt or Hybrid Funds. Similarly, a Small-Cap fund that delivers exceptional returns may also carry significantly higher risk than a Large-Cap fund.

That said, many investors like to track the best-performing mutual funds to understand which schemes have delivered strong returns over a specific period.

India’s Mutual Fund Industry Continues to Grow

The Indian mutual fund industry has witnessed remarkable growth over the last decade, reflecting increasing investor participation and financial awareness.

  • Assets Under Management (AUM) as on May 31, 2026: Rs 81,58,342 crore
  • AUM as on May 31, 2016: Rs 13.82 lakh crore

This means the industry’s assets have expanded by nearly six times over the last 10 years, highlighting the growing popularity of mutual funds among retail and institutional investors.

Top 5 Best-Performing Mutual Funds in the Last One Year (As on July 3, 2026)

Rank

Mutual Fund

Risk

1-Year Return (per cent)

Rs 1 lakh Investment Value

Rs 10,000/Month SIP Value

1

Bank of India Small Cap Direct

Very High

18.28

Rs 1,18,277

Rs 1,43,173

2

HSBC Midcap Direct

Very High

17.54

Rs 1,17,541

Rs 1,37,652

3

Union Small Cap Direct

Very High

17.23

Rs 1,17,231

Rs 1,37,948

4

SBI Healthcare Opportunities Direct

Very High

16.05

Rs 1,16,047

Rs 1,37,843

5

ITI Small Cap Direct

Very High

14.56

Rs 1,14,560

Rs 1,39,253

Source: Data as on July 3, 2026. Returns shown are for the Direct Plan over the last one year.

Should You Invest in the Best-Performing Mutual Funds?

While past performance offers useful insights, it should never be the only factor while selecting a mutual fund. Investors should also evaluate:

  • Their financial goals
  • Investment horizon
  • Risk tolerance
  • Fund category
  • Portfolio quality
  • Consistency of returns
  • Expense ratio

A fund that tops the performance chart today may not necessarily remain the best performer in the future. Building a diversified portfolio aligned with your investment objectives is generally a more sustainable strategy than chasing short-term returns.

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