If you have been tracking mutual fund performance data lately, one number stands out: several equity mutual fund schemes have delivered 3-year annualized returns of more than 22.5% as of September 10, 2026. That is a striking figure when you consider that most diversified equity categories have historically delivered 12-15% CAGR over longer periods.
We compared the latest NAV-based return data across sectoral, thematic, small-cap, mid-cap and large & mid-cap categories and shortlisted 15 mutual fund schemes that crossed this threshold. Below is the complete comparison table along with 5-year and 10-year data (wherever available) so you can evaluate consistency, not just a single strong 3-year window.
Why This Comparison Matters
A single high return number can be misleading if a fund is new or if it happened to benefit from a short-term rally in one sector. That is why this list also shows 5-year and 10-year annualized returns side by side, wherever the fund has that track record. Fewer than half the funds on this list have a 10-year number — most are either sectoral/thematic funds with limited history or newer small-cap funds. This is useful context for anyone comparing short-term outperformance against long-term consistency.
List of Top 15 Mutual Funds With 3-Year Returns Above 22.5%
| S No | Mutual Fund | 3-Yr CAGR | 5-Yr CAGR | 10-Yr CAGR (%) |
|---|---|---|---|---|
| 1 | HDFC Defence Fund | 36.93 | — | — |
| 2 | HDFC Transportation and Logistics Fund | 25.48 | — | — |
| 3 | ITI Small Cap Fund | 25.19 | 19.53 | — |
| 4 | Bandhan Small Cap Fund | 24.71 | 20.25 | — |
| 5 | SBI Healthcare Opportunities Fund | 24.61 | 18.76 | 14.86 |
| 6 | UTI Healthcare Fund | 24.56 | 16.41 | 14.79 |
| 7 | HSBC Midcap Fund | 24.35 | 19.47 | 17.91 |
| 8 | Invesco India Mid Cap Fund | 23.52 | 20.28 | 19.70 |
| 9 | LIC MF Healthcare Fund | 23.29 | 13.04 | — |
| 10 | Mirae Asset Healthcare Fund | 23.20 | 16.02 | — |
| 11 | LIC MF Infrastructure Fund | 23.04 | 21.80 | 17.49 |
| 12 | Motilal Oswal Large and Midcap Fund | 22.86 | 19.17 | — |
| 13 | Invesco India Large & Mid Cap Fund | 22.84 | 17.63 | 17.30 |
| 14 | Invesco India Small Cap Fund | 22.76 | 20.62 | — |
| 15 | ICICI Prudential Transportation and Logistics Fund | 22.50 | — | — |
Data as on September 10, 2026. Returns are annualized (CAGR) for the Direct Plan – Growth option.
Category-Wise Breakdown
Grouping these 15 funds by category gives a clearer picture of where the outperformance is concentrated:
- Sectoral/Thematic (Defence, Transportation & Logistics, Infrastructure): HDFC Defence Fund, HDFC Transportation and Logistics Fund, LIC MF Infrastructure Fund, ICICI Prudential Transportation and Logistics Fund — 4 funds
- Healthcare/Pharma: SBI Healthcare Opportunities Fund, UTI Healthcare Fund, LIC MF Healthcare Fund, Mirae Asset Healthcare Fund — 4 funds
- Small Cap: ITI Small Cap Fund, Bandhan Small Cap Fund, Invesco India Small Cap Fund — 3 funds
- Mid Cap: HSBC Midcap Fund, Invesco India Mid Cap Fund — 2 funds
- Large & Mid Cap: Motilal Oswal Large and Midcap Fund, Invesco India Large & Mid Cap Fund — 2 funds
Healthcare and sectoral/thematic categories together account for 8 of the 15 funds on this list, which reflects how concentrated the recent rally has been in specific pockets of the market rather than broad-based across diversified equity funds.
What Stands Out in This Data
- HDFC Defence Fund leads by a wide margin at 36.93% — nearly 12 percentage points ahead of the second-placed fund. Defence and transportation/logistics are relatively new fund categories in India, so long-term data is not yet available for comparison.
- Only 5 of the 15 funds have a 10-year track record — SBI Healthcare Opportunities Fund, UTI Healthcare Fund, HSBC Midcap Fund, Invesco India Mid Cap Fund, LIC MF Infrastructure Fund and Invesco India Large & Mid Cap Fund. Among these, Invesco India Mid Cap Fund shows the most consistent pattern across all three time frames (23.52% / 20.28% / 19.70%).
- Healthcare funds show a wide gap between 3-year and 5-year numbers in several cases (e.g., LIC MF Healthcare Fund at 23.29% over 3 years versus 13.04% over 5 years), suggesting the recent 3-year window has been unusually favorable for the sector compared to the preceding period.
- Small-cap funds appear three times on this list, consistent with the broader trend of small-cap outperformance over the last 3 years, though this category also carries higher volatility.
Things to Check Before Comparing Further
If you are studying this data for your own research, a few points are worth keeping in mind:
- Point-to-point returns can be skewed by the base date. A 3-year return calculated from a market low will look very different from one calculated from a market high. Check rolling returns over multiple periods for a fuller picture.
- Sectoral and thematic funds carry concentration risk. Defence, healthcare, transportation and infrastructure funds invest in a narrow set of stocks within one sector, which can amplify both gains and drawdowns.
- Expense ratio and fund size matter for Direct Plans, especially for small-cap and thematic funds where capacity constraints can affect future performance.
- Past returns do not indicate future performance. This is standard for all market-linked instruments and applies fully to every fund in this table.
Frequently Asked Questions
Which mutual fund has the highest 3-year return as of September 2026? HDFC Defence Fund tops this list with a 36.93% annualized return over 3 years, as of September 10, 2026.
How many mutual funds delivered more than 22.5% annualized returns over 3 years? Based on the data compared as on 10-Sep-2026, 15 mutual fund schemes across Direct Plans crossed the 22.5% mark for 3-year annualized returns.
Are sectoral or thematic funds suitable for all investors? Sectoral and thematic funds carry higher concentration risk than diversified equity funds since they invest in one sector or theme. This article is for informational and educational comparison purposes only and does not constitute investment advice or a recommendation.
Disclaimer: This article is for informational and educational purposes only, based on publicly available NAV data as on September 10, 2026. It does not constitute investment advice or a recommendation to buy, sell, or hold any mutual fund scheme. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully and consult a SEBI-registered investment advisor before making any investment decision.
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