Looking for Best Equity MFs to Invest for 3 Years? Check These 6 Funds with over 27% Returns

Why It Matters

These high‑performing funds offer investors a compelling three‑year track record, signaling strong sector exposure and potential for mid‑term portfolio gains in a competitive Indian mutual‑fund landscape.

Key Takeaways

• Bandhan Small Cap leads with 30.72% three‑year return
• All six funds maintain four‑ or five‑star ratings
• Expense ratios hover around 2%, slightly above low‑cost index funds
• Combined AUM exceeds $5 billion, showing strong investor demand
• Infrastructure and pharma funds deliver near‑27% returns, diversifying sector exposure

Pulse Analysis

The Indian equity mutual‑fund market has entered a phase where mid‑term performance is a key differentiator for investors seeking higher yields than traditional fixed‑income options. Over the last three years, a select group of funds has outpaced the broader market, delivering cumulative returns above 27%. This outperformance reflects a combination of favorable macroeconomic trends, such as robust domestic consumption, and strategic sector allocations that capture growth in small‑cap, infrastructure, and healthcare segments. While the overall fund universe remains diversified, these top performers illustrate how focused investment theses can generate superior outcomes.

Among the six highlighted funds, Bandhan Small Cap Fund stands out with a 30.72% return, backed by a sizable AUM of roughly $2.4 billion and a five‑star rating from MF Screener. The other five funds—LIC Infrastructure, DSP India T.I.G.E.R, ICICI Prudential P.H.D., Canara Robeco Infrastructure, and Franklin Build India—each post returns between 26.5% and 28.9%, maintain four‑ or five‑star ratings, and manage assets ranging from $100 million to $600 million. Their expense ratios cluster around 2%, a modest premium that investors accept for the potential upside. Sector focus varies: infrastructure funds benefit from government spending, while the pharma‑healthcare fund taps into rising demand for medical services, and the small‑cap fund captures the agility of emerging companies.

For investors, the data underscores the importance of balancing return potential with risk and cost considerations. High returns often accompany higher volatility, especially in small‑cap and sector‑specific funds, so prudent allocation should align with an investor’s time horizon and risk tolerance. The modest expense ratios suggest that active management can add value without eroding gains excessively. Looking ahead, continued fiscal stimulus and demographic trends are likely to sustain demand for the sectors represented, making these funds attractive candidates for a diversified, three‑year investment strategy.