Finding equity mutual funds that deliver over 20% CAGR consistently across 3, 5 and 10 years is rare. Market cycles change and volatility often pulls long-term returns down. Yet, a handful of actively managed equity funds have managed to beat the odds and stay on top across timeframes.
Three such funds — Nippon India Small Cap Fund – Direct Plan – Growth, Edelweiss Mid Cap Fund – Direct Plan – Growth and Invesco India Midcap Fund – Direct Plan – Growth — have delivered strong and consistent long-term returns, making them stand out on performance charts. But does that automatically make them a good investment today? Here’s a closer look.
Nippon India Small Cap Fund (Direct): Long-term small-cap wealth creator
The Nippon India Small Cap Fund (Direct) has built a strong reputation as one of the most consistent small-cap mutual funds over the long term. The fund has delivered 20.17% CAGR over 3 years, 26.23% over 5 years, and 21.36% over 10 years, making it a standout performer across market cycles.
Over the last decade, an investment of ₹1 lakh has grown to around ₹6.93 lakh, underlining its long-term wealth creation potential.
Launched in January 2013, the fund is benchmarked against the NIFTY Smallcap 250 TRI and manages assets worth ₹68,287 crore as of December 31, 2025. Given its focus on small-cap stocks, the fund falls under the Very High Risk category and is better suited for investors with a long investment horizon and higher risk appetite.
Key risk and performance indicators
Mean return: 21.68%
Sharpe ratio: 0.93
Alpha: 3.27, indicating consistent outperformance over the benchmark despite market volatility
From a portfolio standpoint, the fund is tilted towards industrials, consumer-oriented sectors and materials, while maintaining relatively lower exposure to financial stocks.
Top holdings include:
MCX
HDFC Bank
State Bank of India (SBI)
Karur Vysya Bank
Bharat Heavy Electricals (BHEL)
Overall, the Nippon India Small Cap Fund’s combination of strong long-term returns, disciplined risk-adjusted performance and diversified stock selection has helped it remain a key name among top-performing small-cap mutual funds.
Edelweiss Mid Cap Fund (Direct): Strong alpha with controlled volatility
The Edelweiss Mid Cap Fund (Direct) has emerged as a consistent performer among mid-cap mutual funds, delivering 26.83% CAGR over 3 years, 24.98% over 5 years, and 20.47% over 10 years.
Over the last decade, an investment of ₹1 lakh has grown to around ₹6.43 lakh, highlighting the fund’s ability to generate steady long-term returns.
Launched in January 2013 and benchmarked against the NIFTY Midcap 150 TRI, the fund manages assets worth ₹13,650 crore. Like most mid-cap strategies, it is classified under the Very High Risk category and is suitable for investors with a long-term horizon.
What makes this fund stand out is its strong risk-adjusted performance, despite market volatility.
Key risk and performance indicators
Mean return: 25.80%
Sharpe ratio: 1.27
Sortino ratio: 1.64
Alpha: 4.47, indicating consistent excess returns over the benchmark
From a portfolio perspective, the fund has a clear tilt towards financial stocks, which account for over 30% of its assets. It also maintains meaningful exposure to consumer and technology sectors, helping balance growth and stability.
Top holdings include:
Persistent Systems
Coforge
Marico
MCX
BSE
The Federal Bank
Overall, the Edelweiss Mid Cap Fund combines strong long-term returns with relatively controlled volatility, making it a notable option in the best mid-cap mutual funds category.
Invesco India Mid Cap Fund (Direct): Consistency across market cycles
The Invesco India Mid Cap Fund (Direct) has shown remarkable consistency, topping the 3-year return chart among peers with 26.89% CAGR, while also delivering 23.39% over 5 years and 20.07% over 10 years.
Over a decade, ₹1 lakh invested in the fund has grown to nearly ₹6.22 lakh.
Launched in January 2013 and benchmarked against the BSE 150 MidCap TRI, the fund manages assets worth ₹10,296 crore. It is also categorised under Very High Risk, in line with its mid-cap focus.
Despite this, the fund’s risk metrics remain robust, reflecting disciplined fund management and effective stock selection.
Key risk and performance indicators
Mean return: 26.56%
Sharpe ratio: 1.26
Sortino ratio: 1.63
Alpha: 4.88, signalling strong outperformance over the benchmark
On the portfolio side, the fund has a strong tilt towards financials and healthcare, with selective exposure to technology and real estate stocks, adding diversification.
Top holdings include:
The Federal Bank
AU Small Finance Bank
L&T Finance
Swiggy
InterGlobe Aviation
BSE
With consistent returns across timeframes and solid risk-adjusted performance, the Invesco India Mid Cap Fund stands out among top-performing mid-cap funds for long-term investors.
Should you invest? A word of caution on chasing past returns
While these funds have delivered exceptional historical returns, investors should remember that past performance alone should not be the sole basis for investment decisions. High returns often come with high volatility, especially in small-cap and mid-cap funds, which can see sharp drawdowns during market corrections.
Before investing, investors should also look at risk profile, investment horizon, portfolio overlap, fund size, expense ratio, and consistency across market cycles. Most importantly, these funds are better suited for investors with a long-term horizon and high risk tolerance, and ideally should form only a part of a diversified equity portfolio.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.