Mutual funds remain one of the most attractive investment options for individuals aiming to create long-term wealth through professional fund management. They allow investors to participate in equity and debt markets without directly picking and managing individual securities. While market trends can change rapidly, certain funds have consistently delivered outstanding performance over the last two years. In this article, we highlight the Top 12 mutual funds that outperformed in the last two years, delivering returns ranging from 66% to 104% in absolute terms. We will discuss their investment objectives, past performance, potential risks, and suitability for different types of investors.
Earlier we wrote about 10 Mutual Funds that Outperformed in Last 1 year with 37% to 82%.
List of Top 12 Mutual Funds Outperformed in Last 2 Years
| Rank | Mutual Fund Scheme | 2-Year Annualised Return (%) | Absolute Return (%) | 1 Lakh would have been (₹) |
|---|---|---|---|---|
| 1 | HDFC Defence Fund | 43% | 104% | 2,04,000 |
| 2 | Nippon India Taiwan Equity Fund | 39% | 93% | 1,93,000 |
| 3 | HDFC Transportation and Logistics Fund | 34% | 80% | 1,80,000 |
| 4 | SBI Long Term Advantage Fund – Series V | 31% | 72% | 1,72,000 |
| 5 | Invesco India Mid Cap Fund | 30% | 69% | 1,69,000 |
| 6 | Bandhan Small Cap Fund | 30% | 69% | 1,69,000 |
| 7 | LIC MF Infrastructure Fund | 30% | 69% | 1,69,000 |
| 8 | ICICI Prudential Transportation and Logistics Fund | 30% | 69% | 1,69,000 |
| 9 | Invesco India Large & Mid Cap Fund | 29% | 66% | 1,66,000 |
| 10 | Invesco India Focused Fund | 29% | 66% | 1,66,000 |
| 11 | Invesco India PSU Equity Fund | 29% | 66% | 1,66,000 |
| 12 | Franklin India Opportunities Fund – Direct Growth | 29% | 66% | 1,66,000 |
Data as as on 2-Oct-2025 from Moneycontrol and Valueresearch
Deep Dive into Each Mutual Fund Scheme
#1 – HDFC Defence Fund
- Fund Objective:
- Invests primarily in companies operating in the defence and allied sectors.
- Annualised Returns:
- 1 Year: 12%
- 2 Years: 43%
- Who Can Invest:
- Aggressive investors
- Those with high-risk appetite
- Long-term horizon investors
- Risk Factors:
- Sector concentration risk
- Policy/regulatory changes in defence procurement
This fund is among 10 Mutual Funds That Crashed the Most in the Last 3 Months in 2025 (-7% to -15%).
#2 – Nippon India Taiwan Equity Fund
- Fund Objective:
- Invests in Taiwanese companies, especially in the semiconductor and technology sectors.
- Annualised Returns:
- 1 Year: 48%
- 2 Years: 39%
- 3 Years: 39%
- Who Can Invest:
- Investors seeking exposure to Taiwan’s tech industry boom
- Investors with appetite for international equity
- Risk Factors:
- Geopolitical tensions
- Currency volatility
#3 – HDFC Transportation and Logistics Fund
- Fund Objective:
- Focuses on companies in transportation, logistics, and related industries.
- Annualised Returns:
- 1 Year: 7%
- 2 Years: 34%
- Who Can Invest:
- Investors betting on growth in logistics
- Those optimistic about India’s transport sector
- Risk Factors:
- Dependence on economic cycles
- Rising fuel/operating costs
#4 – SBI Long Term Advantage Fund – Series V
- Fund Objective:
- Close-ended equity-linked savings scheme investing across sectors.
- Annualised Returns:
- 1 Year: 9%
- 2 Years: 31%
- 3 Years: 24%
- 5 Years: 25%
- Who Can Invest:
- Long-term investors
- Investors seeking tax-saving potential
- Risk Factors:
- Market volatility
- Limited liquidity due to close-ended structure
#5 – Invesco India Mid Cap Fund
- Fund Objective:
- Focuses on mid-cap companies with strong growth potential.
- Annualised Returns:
- 1 Year: 5%
- 2 Years: 30%
- 3 Years: 29%
- 5 Years: 29%
- 10 Years: 20%
- Who Can Invest:
- Investors seeking higher growth than large caps
- Those with moderate to high risk tolerance
- Risk Factors:
- Higher volatility than large caps
- Sector concentration risks
Explore more about this fund at 5 Best Midcap Mutual Funds to Invest in 2025 (Based on Rolling Returns),
#6 – Bandhan Small Cap Fund
- Fund Objective:
- Focuses on small-cap companies with high growth potential.
- Annualised Returns:
- 1 Year: -3%
- 2 Years: 30%
- 3 Years: 31%
- 5 Years: 32%
- Who Can Invest:
- Long-term investors
- Those comfortable with high volatility
- Risk Factors:
- High volatility in small-cap segment
- Liquidity risks
#7 – LIC MF Infrastructure Fund
- Fund Objective:
- Invests in companies in the infrastructure sector.
- Annualised Returns:
- 1 Year: -4%
- 2 Years: 30%
- 3 Years: 29%
- 5 Years: 33%
- 10 Years: 17%
- Who Can Invest:
- Investors bullish on infrastructure growth
- Those with long-term horizon
- Risk Factors:
- Sector-specific risks
- Policy changes
#8 – ICICI Prudential Transportation and Logistics Fund
- Fund Objective:
- Invests in companies in the transportation and logistics industry.
- Annualised Returns:
- 1 Year: 4%
- 2 Years: 30%
- Who Can Invest:
- Investors seeking exposure to logistics sector
- Growth-oriented investors
- Risk Factors:
- Cyclical risks
- Regulatory changes
#9 – Invesco India Large & Mid Cap Fund
- Fund Objective:
- Invests in a balanced mix of large and mid-cap companies.
- Annualised Returns:
- 1 Year: 3%
- 2 Years: 29%
- 3 Years: 26%
- 5 Years: 25%
- 10 Years: 17%
- Who Can Invest:
- Investors looking for a blend of stability and growth
- Risk Factors:
- Market volatility
- Economic slowdown risks
#10 – Invesco India Focused Fund
- Fund Objective:
- Invests in a concentrated portfolio of high-conviction ideas.
- Annualised Returns:
- 1 Year: -3%
- 2 Years: 29%
- 3 Years: 25%
- 5 Years: 24%
- Who Can Invest:
- High-risk investors
- Those seeking focused exposure
- Risk Factors:
- Concentration risk
- High volatility
#11 – Invesco India PSU Equity Fund
- Fund Objective:
- Invests in Public Sector Undertakings across sectors.
- Annualised Returns:
- 1 Year: -4%
- 2 Years: 29%
- 3 Years: 33%
- 5 Years: 32%
- 10 Years: 19%
- Who Can Invest:
- Investors confident in PSU turnaround stories
- Risk Factors:
- Policy changes
- Sector-specific volatility
Ealier we covered this fund as part of 8 Mutual Fund Schemes with 3 Months Returns Between 20% to 54%.
#12 – Franklin India Opportunities Fund
- Fund Objective:
- Invests across diversified sectors with a focus on growth opportunities.
- Annualised Returns:
- 1 Year: -1%
- 2 Years: 29%
- 3 Years: 31%
- 5 Years: 29%
- 10 Years: 17%
- Who Can Invest:
- Investors seeking diversified exposure with growth tilt
- Risk Factors:
- Market risk
- Sector allocation changes
We analysed this fund as part of 15 Mutual Funds Outperformed in Last 3 Years with 120% to 380% Returns earlier
Conclusion
The last two years have been exceptional for certain thematic, sectoral, and mid-cap mutual funds. While these returns are impressive, it is important to remember that high-performing funds often come with higher risks. Investors should assess their risk appetite, investment horizon, and financial goals before committing capital to such schemes.
hai
best 1 yr mutual fund indian companies
good