The financial market of India is broadly diversified, comprising several financial assets, from instruments, commodities, to currencies. Among them, Mutual funds have created a name for themselves based on their performance and cost-effectiveness. They enable any retail investor to invest in various financial assets, according to one’s financial capacity. These funds are professionally managed by a fund manager, enhancing their trustworthiness and decreasing the risk factor. As of March 2025, nearly 5.34 crore people have become unique mutual fund investors in India.
However, among forty-two active registered fund houses and more than thousands of active SIP investment plans, how can one find some of the best mutual funds 2025 schemes? We are here to guide and help you choose some of the best mutual funds 2025 plans, with ideal SIP investment India and consistently higher returns.
What Makes Mutual Funds Distinct
Mutual funds stand out among financial instruments for their versatility, affordable SIP investment, and security.. The SIP Investment India is affordable, with lower expenses,se ratios making them ideal for Indian investors. Mutual funds are divided into multiple categories and subcategories, based on their portfolio holdings.
Categories of Mutual Funds
In mutual funds, Equity Funds, Debt funds, Hybrid funds, and ELSS are highly popular and attract maximum SIP investments. Lately, Gold Bonds are catching investors’ eyes, for their performance and rising returns.
- Gold Funds:- Gold mutual funds are the ones that deal with gold reserves or gold-related documents. Considered as one of the best mutual funds 2025, they pool money from investors and invest it in buying gold bullions, stocks of gold mining companies, or gold exchange traded funds (ETFs).
- Equity Funds:- In this scheme, the SIP Investments majorly invest in stocks or shares of various companies in a diversified manner. Their purpose is to gain higher returns but also entail high risks.
- Debt Funds:- Debt funds are the mutual fund plans that invest primarily in fixed income instruments like government bonds, corporate bonds, debentures, or money market instruments. It offers fixed income and less to moderate risk.
- ELSS Funds:- This is a category of equity funds known for their tax-saving feature. Here, more than eighty percent of the investment is done on equity instruments, across various sectors, businesses, and proportions. Investors can claim an income tax deduction based on their investment amount under Section 80C.
- Hybrid Funds:- Hybrid mutual funds are the SIP investment India schemes that invest in equities, debts, and other commodities together. Currently, two types of funds among them are gaining traction.
- Dynamic Asset Allocation Funds:- Renowned as balanced adjusted funds, these funds invest mainly in debts and equities,and operate according to market conditions, allowing adjustments in fund allocations of each asset accordingly. Usually the allocations are changed between two asset classes and are more responsive to changes in market movements.
- Multi-Asset Allocation Funds:- These funds must invest in three asset classes, equity, debt, gold, or any other commodities. The minimum investment proportions in each asset should be more than 10%. Here, the allocation can be in more than two asset classes and proportion does not change drastically.
Crucial Features of Best Mutual Funds 2025
Expense Ratios
Basically, it is the money charged by a fund house annually from its investors to manage their funds. The ideal choice would be a fund house having a lower ratio.
Fund Performance
A mutual fund’s effectiveness is evaluated by its fund performance. Fund Performance is the factor that shows how much return has been delivered by a mutual fund over a certain timeframe.
One needs to consider longer durations, ideally five to ten years, to compare the returns provided by a fund against its benchmark and competitors. The returns need to be higher than benchmarks
Taxes
The majority of capital gains earned through mutual funds are subject to Income tax. Hence, one needs to see the taxes a SIP investment India draws.
Risks and Exit Load
Mutual funds are subject to market risk. Hence, investors need to pick funds as per their risk-bearing capability.
Exit load is the fee charged by the fund house when an investor sells his or her units. Since it reduces the returns, an investor should preferably choose mutual funds with lower exit loads.
Mutual Funds That Have Emerged as Market Leaders
Here are some of the best mutual funds 2025 schemes with ideal SIP investment India plans based on their fund performance, return rates for 5 years, risks associated as per Value Research, and lowest expense ratios under each category.
Gold Funds Performance at a Glance
| Fund Name | 5 Year Returns (%) | 5 Year SIP Returns (growth of 10k/mth) | 5 Year Returns (growth of 1 lakh) | Riskometer | Total |
| Axis Gold Fund – Direct Plan | 17.74 | 11,86,944 | 2,26,299 | Very High | 0.17 |
| LIC MF Gold ETF FoF – Direct Plan | 17.76 | 11,80,876 | 2,26,499 | Very High | 0.32 |
| SBI Gold Fund- Direct Plan | 18.19 | 11,85,191 | 2,30,600 | High | 0.10 |
Source: Value Research
Top Gold Fund – Axis Gold Fund – Direct Plan
Ideally, the best mutual fund 2025 among them is Axis Gold Fund – Direct Plan. In one year, this fund has given a 50.33% return. Further, it has provided 30.35% returns over three years and 16.94% over five years, exhibiting a robust fund performance.
It has ₹ 1,556.55 crore AUM, making it one of the largest SIP investments in India. On the other hand, its expense ratio is merely 0.17. The entry fees are zero, while the exit load is 1% if the units are redeemed within 15 days. Thus, it is an affordable yet highly reliable fund of funds (FoF).
Debt Funds Performance at a Glance
| Fund Name | 5 Year Returns (%) | 5 Year SIP Returns (growth of 10k/mth) | 5 Year Returns (growth of 1 lakh) | Riskometer | Total |
| LIC MF Medium to Long Duration Fund – Direct Plan | 5.89 | 7,22,214 | 1,33,113 | Moderate | 0.21 |
| ICICI Prudential Bond Fund- Direct Acton Plan | 6.3 | 7,22,577 | 1,35,736 | Moderate | 0.64 |
| SBI Magnum Income Fund- Direct Plan | 6.38 | 7,19,642 | 1,36,238 | Moderately High | 0.77 |
Source: Value Research
Top Debt Fund – LIC MF Medium to Long Duration Fund – Direct Plan
Here, LIC MF Medium to Long Duration Fund – Direct Plan has emerged as the top SIP investment India. The plan spans from medium to a longer time period.
It has one of the lowest expense ratios among its peers i.e., 0.21. Its exit load is 0.25%, only if units are redeemed within 15 days. Nearly 89% of its portfolio holdings are Government bonds and PSU securities. Further, it gives relatively good returns, making it one of the best mutual funds 2025
ELSS Mutual Funds Performance at a Glance
| Fund Name | 5 Year Returns (%) | 5 Year SIP Returns (growth of 10k/mth) | 5 Year Returns (growth of 1 lakh) | Riskometer | Total |
| Taurus ELSS Tax Saver Fund – Direct Plan | 19.24 | 8,96,585 | 2,41,065 | Very High | 0.31 |
| Quantum ELSS Tax Saver Fund – Direct Plan | 20.95 | 8,98,947 | 2,58,817 | Very High | 0.62 |
| Parag Parikh ELSS Tax Saver Fund – Direct Plan | 22.45 | 9,43,674 | 2,75,328 | Very High | 0.62 |
Source: Value Research
Top ELSS Fund – Taurus ELSS Tax Saver Fund – Direct Plan
It is the market leader in the category due to its lowest expense ratio, i.e., 0.31. The fund has given strong returns such as 62.88% in the last 3 years, 141.30% in the last 5 years, and over 283% in the last 10 years, making it one of the ideal SIP investments India schemes. As the expense ratio is lower, the maximum returns will remain with the investors.
The majority of its portfolio holdings comprises financial stocks and blue-chip companies.
Large and Mid-Cap Mutual Funds Performance at a Glance
| Fund Name | 5 Year Returns (%) | 5 Year SIP Returns (growth of 10k/mth) | 5 Year Returns (growth of 1 lakh) | Riskometer | Expense Ratio |
| Bandhan Large & Mid Cap Fund – Direct Plan | 27.26 | 10,68,221 | 3,33,790 | Very High | 0.56 |
| Invesco India Large & Mid Cap Fund – Direct Plan | 25.42 | 10,76,445 | 3,10,362 | Very High | 0.61 |
| Motiilal Oswal Large and Midcap Fund – Direct Plan | 30.38 | 11,45,771 | 3,76,694 | Very High | 0.67 |
| ICICI Prudential Large & Mid Cap Fund – Direct Plan | 28.89 | 10,45,472 | 3,55,776 | Very High | 0.78 |
Source: Value Research
Top Large and Mid-Cap – Bandhan Large & Mid Cap Fund – Direct Plan
This mutual fund has emerged as one of the best mutual funds 2025 plans in the large & mid-cap funds category due to its outstanding returns and lower expense ratio. It has generated 26.94% returns over five years, 24.92% returns over three years, and 27.59% returns over two years. Its expense ratio is 0.56 as well, making it a beneficial SIP investment.
The fund managers actively monitor the fund performance, portfolio holdings, and act according to market movements. Its holdings include large stocks like HDFC, SBI, ICICI, and Maruti Suzuki, etc.
Dynamic Asset Allocation Funds Performance at a Glance
| Fund Name | 5-yr annualised return* | Value of ₹10,000/month SIP over 5 years† | Value of ₹1,00,000 lump sum over 5 years† | Expense ratio (Direct) | Risk-ometer / Risk level |
| HDFC Balanced Advantage Fund (Direct) | ~ 24.17% p.a | ₹15.1 lakhs (approx) | ₹2.95 lakhs | ~ 0.77% | Very High Risk |
| Aditya Birla Sun Life Balanced Advantage Fund (Direct) | ~ 15.25% p.a. | ≈ ₹11.2 lakhs | ₹2.02 lakhs | ~ 0.67% | High Risk |
| Edelweiss Balanced Advantage Fund (Regular Plan data; Direct may differ) | ~ 14.12% | ≈ ₹10.0 lakhs | ₹1.92 lakhs | ~ 1.69% | Very High Risk |
Source: Value Research
Top Dynamic Asset Allocation – HDFC Balanced Advantage Fund (Direct)
It is the second active mutual fund in India to have assets under management (AUM) ₹1 trillion, making it one of the highest SIP investments India. Here, the long-term capital gain is free from taxation up to 1 lakh.
It has given an annual return of 24.85% while the category average remains between 14%- 15%.
Multi Asset Allocation Funds Performance at a Glance
| Fund Name | 5-Yr Annualized Return (%) | ₹10,000 SIP (5 Years) | ₹1,00,000 Lump Sum (5 Years) | Expense Ratio (%) | Riskometer |
| Quant Multi Asset Allocation Fund | 25.95 | ₹12,32,972 | ₹3,16,950 | 0.6 | Moderately High |
| ICICI Prudential Multi Asset Fund | 25.59 | ₹12,19,751 | ₹3,12,446 | 0.67 | Moderately High |
| Nippon India Multi Asset Allocation Fund | 18.82 | ₹9,99,858 | ₹2,36,836 | 0.25 | Moderate |
Source: Value Research
Top Multi-asset Fund – Quant Multi Asset Allocation Fund
It has performed as a market leader by yielding the highest five-year annualized returns, 25%. It has given consistent returns over two, three, and five-year timeframes. Its expense ratio is nearly equal to its peers despite delivering almost highest returns. It makes the SIP investments attractive.
The fund takes a lower-risk approach, even protecting investor capital during high volatility. It has a diversified portfolio including blue-chip stocks, government securities, and gold, enabling investors to invest broadly.
In Conclusion
Every investment is subject to market risk, and so are mutual funds. When the market fluctuates and becomes volatile, the financial markets face their rollercoaster. However, these mutual funds handpicked by us have shown their resilience and have given consistent returns over time within a mere expense ratio, thus making them one of the ideal SIP investments 2025. They have truly emerged as some of the best mutual funds 2025. So go ahead, assess your risk, returns, and financial needs, and pick your ideal mutual fund.
DISCLAIMER: The information given in this blog is for educational purposes only. Any content of this blog is not investment advice.
