Technology mutual funds have made a strong comeback over the past month. After spending several quarters under pressure, the IT sector witnessed a sharp rally, helping many technology and digital-themed mutual funds generate 10% to 17% returns in just one month. While such short-term returns naturally grab investors’ attention, it’s important to understand what’s driving this performance. Is this the beginning of a sustained trend or simply a short-term sector rebound?
In this article, we look at 20 mutual funds that delivered between 10% and 17% returns in the last one month, analyse the categories dominating the list, compare their longer-term performance wherever available, and discuss whether investors should consider such funds based purely on recent returns.
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Why Technology Mutual Funds Rallied in the Last One Month
One thing becomes immediately obvious after looking at this list—technology-oriented mutual funds completely dominated the rankings.
Several factors contributed to this rally:
- Improvement in global technology stocks
- Positive sentiment around Artificial Intelligence (AI)
- Better earnings expectations for Indian IT companies
- Strong buying interest in large-cap IT stocks
- Recovery in global technology indices
As a result, almost every IT index fund, technology fund and digital-themed mutual fund posted double-digit gains during the month.
However, investors should remember that technology funds are sectoral funds, and sectoral funds can outperform significantly during favourable periods and underperform just as sharply when market sentiment changes.
20 Mutual Funds That Delivered 10% to 17% Returns in Just 1 Month (Data as of 2-Aug-2026)
| Mutual Fund | 1 Month Return (%) |
|---|---|
| ICICI Prudential Nifty IT Index Fund | 17.02 |
| Axis Nifty IT Index Fund | 17.00 |
| DSP Nifty IT Index Fund | 17.00 |
| Nippon India Nifty IT Index Fund | 17.00 |
| Bandhan Nifty IT Index Fund | 16.99 |
| SBI Nifty IT Index Fund | 16.97 |
| Navi Nifty IT Index Fund | 16.78 |
| HDFC Technology Fund | 14.92 |
| SBI Technology Opportunities Fund | 14.41 |
| Aditya Birla Sun Life Digital India Fund | 13.73 |
| Kotak Technology Fund | 13.26 |
| ICICI Prudential Technology Fund | 12.61 |
| Tata Digital India Fund | 11.93 |
| HDFC Nifty India Digital Index Fund | 11.45 |
| Tata Nifty India Digital ETF FoF | 11.38 |
| Motilal Oswal Digital India Fund | 11.25 |
| ICICI Prudential Strategic Metal and Energy Equity FoF | 11.15 |
| Mirae Asset Hang Seng TECH ETF FoF | 10.87 |
| WhiteOak Capital Digital Bharat Fund | 10.71 |
| Franklin India Technology Fund | 10.64 |
What Stands Out from this List?
The biggest takeaway is that technology funds occupy almost the entire list.
IT Index Funds dominated
Seven of the top positions belong to Nifty IT Index Funds.
These include:
- ICICI Prudential Nifty IT Index Fund
- Axis Nifty IT Index Fund
- DSP Nifty IT Index Fund
- Nippon India Nifty IT Index Fund
- Bandhan Nifty IT Index Fund
- SBI Nifty IT Index Fund
- Navi Nifty IT Index Fund
Since all these funds track the same benchmark, it is natural for their returns to be almost identical.
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Active Technology Funds also performed well
Several actively managed technology funds generated attractive returns.
Some notable names include:
- HDFC Technology Fund
- SBI Technology Opportunities Fund
- Franklin India Technology Fund
- Tata Digital India Fund
- ICICI Prudential Technology Fund
- Kotak Technology Fund
- Aditya Birla Sun Life Digital India Fund
These funds invest across software companies, IT services, digital businesses and technology-related sectors.
Digital and International Technology Funds
The list also includes funds investing beyond traditional IT companies.
Examples include:
- Mirae Asset Hang Seng TECH ETF FoF
- WhiteOak Capital Digital Bharat Fund
- Tata Nifty India Digital ETF FoF
- Motilal Oswal Digital India Fund
These funds provide exposure to digital businesses, internet companies and technology-driven businesses.
One fund from a completely different category
An interesting exception is:
ICICI Prudential Strategic Metal and Energy Equity FoF
Unlike the other schemes, this fund benefited from strong performance in the metals and energy sectors and delivered an impressive 64.05% one-year return in addition to an 11.15% one-month return.
1-Month Returns vs 1-Year Returns – An Interesting Observation
This is perhaps the most important takeaway from the data.
At first glance, returns of 15% to 17% in just one month appear extraordinary.
However, when you compare them with the one-year performance, the picture changes completely.
For example:
- Most Nifty IT Index Funds have generated nearly 17% in one month.
- Yet their 1-year returns remain around negative 11%.
- Even several actively managed technology funds continue to show negative one-year returns despite the recent rally.
This indicates that the latest surge is largely a recovery from previous declines rather than sustained long-term outperformance.
It also reminds investors that short-term returns can sometimes be misleading when viewed in isolation.
Funds with Consistent Longer-Term Track Record
While several schemes are relatively new, a few funds have demonstrated a longer performance history.
SBI Technology Opportunities Fund
- 1 Month Return: 14.41%
- 3 Year CAGR: 11.47%
- 5 Year CAGR: 9.39%
- 10 Year CAGR: 17.00%
This suggests the fund has delivered returns across multiple market cycles rather than relying solely on the recent rally.
Franklin India Technology Fund
- 1 Month Return: 10.64%
- 3 Year CAGR: 12.27%
- 5 Year CAGR: 9.73%
- 10 Year CAGR: 16.28%
Franklin’s fund also has a reasonably long performance history within the technology sector.
ICICI Prudential Technology Fund
- 3 Year CAGR: 9.11%
- 5 Year CAGR: 6.41%
- 10 Year CAGR: 17.37%
This illustrates that although technology funds may experience periods of weakness, some have generated healthy long-term returns over extended periods.
Should Investors Chase One-Month Winners?
Not necessarily.
One-month performance reflects what happened during a very short period.
Before investing, investors may also evaluate:
- Fund category
- Investment objective
- Portfolio concentration
- Risk profile
- Long-term consistency
- Performance across different market cycles
- Suitability with their own financial goals
Instead of investing purely based on recent returns, investors may consider whether such funds fit their overall asset allocation and investment horizon.
Risk Factors You Should Know
Technology funds can be highly volatile.
Some important risks include:
- Sector concentration risk
- Technology funds invest predominantly in one sector.
- Poor performance in IT companies can significantly impact returns.
- Global dependency
- Indian IT companies depend heavily on overseas demand.
- Slowdowns in developed economies can affect earnings.
- Short-term volatility
- Technology stocks often witness sharp swings.
- Strong rallies can sometimes be followed by equally sharp corrections.
- Index funds follow benchmarks
- Passive funds cannot avoid market declines.
- They simply mirror the underlying index.
- Recent returns may not continue
- One-month performance should not be treated as an indicator of future returns.
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How Should Investors Read Such Rankings?
Articles highlighting top-performing mutual funds are useful for identifying market trends.
However, they should not be interpreted as buy recommendations.
Instead, investors can use such lists to:
- Understand which sectors are currently performing well.
- Compare longer-term returns.
- Study market leadership.
- Track sector rotation.
- Research suitable funds before making investment decisions.
Looking beyond a single month’s performance generally provides a more balanced view.
Frequently Asked Questions (FAQs)
Is a 15% to 17% return in one month common?
No. Such returns are relatively uncommon and are generally seen during strong sector-specific rallies or market recoveries.
Why are most funds in this list technology funds?
Technology stocks witnessed a sharp rebound during the last month, resulting in strong gains across IT index funds and actively managed technology funds.
Should investors invest based only on one-month returns?
No. One-month returns represent only a short period. Investors may also review longer-term performance, investment objective, portfolio characteristics and risk factors.
Why are several one-year returns still negative?
Many technology funds had corrected sharply over the past year. The recent one-month rally has helped recover part of those losses, but not all of them.
Are technology mutual funds suitable for everyone?
Technology funds are sector-specific funds and can be more volatile than diversified equity funds. Investors should understand the associated risks before considering them.
Conclusion
The last month clearly belonged to technology-oriented mutual funds. IT index funds, active technology funds and digital-themed schemes dominated the performance charts by delivering returns ranging from 10% to 17%.
At the same time, the data also highlights an important lesson—many of these funds continue to have negative one-year returns despite the impressive one-month rally. This shows why investors should avoid making decisions based solely on short-term performance.
Instead, evaluating longer-term consistency, investment objectives and overall portfolio suitability can help investors make more informed decisions.
Data Source: Performance data as of 2-August-2026. Returns are point-to-point and may vary depending on the date of calculation.
Disclaimer
This article is published purely for educational and informational purposes and should not be construed as investment advice or a recommendation to buy, sell or hold any mutual fund scheme. Mutual fund investments are subject to market risks. Investors should read all scheme-related documents carefully and consult a qualified financial adviser if required before making investment decisions.
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