Imagine investing in mutual funds that have managed to outperform their respective benchmarks not just over one period, but consistently across 1, 3, 5, and 10 years. Such sustained outperformance suggests that these funds have added value beyond what investors could have earned simply by tracking the market.
However, market performance has not been uniform. The last year has been marked by volatility and intermittent corrections triggered by US-Iran tensions, global trade war, macroeconomic pressures, and currency fluctuations.
While the three- and five-year periods have benefited mutual funds across equity categories from the strong post-Covid 19 rally. Over the past 10 years, benchmark indices have rewarded long-term investors with double-digit annualised returns despite phases of market stress, including the pandemic crash, global inflation concerns, and geopolitical uncertainties.
When markets rally, many mutual funds ride the wave. But the real test of a fund’s quality is whether it can consistently outperform its benchmark across different market cycles.
Take a look at funds that not only have consistently outperformed their benchmarks over the last 1, 3, 5, and 10 years but are also 5-star rated by Value Research. (Performance data of these funds is also sourced from Value Research)
Mutual funds that beat their benchmarks over 1, 3, 5 and 10 years
The funds in the list below have not only delivered positive returns across different market cycles but have also outperformed their respective benchmarks over each time period.
| Fund name | 1-Year Return | Benchmark | 3-Year Return | Benchmark | 5-Year Return | Benchmark | 10-Year Return | Benchmark |
| SBI Healthcare Opportunities Fund – Direct Plan | 11.02% | 8.19% | 26.10% | 25.48% | 16.65% | 13.92% | 14.53% | 12.86% |
| Nippon India Growth Mid Cap Fund – Direct Plan | 3.03% | -0.83% | 23.10% | 19.39% | 20.36% | 16.21% | 19.16% | 17.60% |
| HDFC Mid Cap Fund – Direct Plan | 2.53% | -0.83% | 20.99% | 19.39% | 19.72% | 16.21% | 18.54% | 17.60% |
| Edelweiss Mid Cap Fund – Direct Plan | 2.33% | 0.50% | 23.59% | 19.95% | 19.91% | 16.87% | 19.74% | 17.72% |
| Motilal Oswal ELSS Tax Saver Fund – Direct Plan | 2.26% | -3.46% | 23.44% | 12.72% | 18.54% | 11.72% | 18.27% | 13.79% |
| Bandhan Large & Mid Cap Fund – Direct Plan | 1.27% | -4.22% | 21.54% | 11.84% | 17.81% | 10.92% | 16.88% | 13.32% |
| Invesco India Financial Services Fund – Direct Plan | 0.98% | -2.24% | 18.20% | 8.34% | 15.05% | 10.06% | 16.42% | 12.41% |
| Source: Value Research |
SBI Healthcare Opportunities Fund – Direct Plan
Since its inception on January 1, 2013, this mutual fund has produced a 17.61% return. Tanmaya Desai is now in charge of managing the fund. The fund’s expense ratio is 0.77%. The fund tracks the BSE Healthcare TRI benchmark.
Top 10 holdings: Sun Pharmaceutical, Divi’s Lab, Acutaas Chemicals, Apollo Hospitals, Max Healthcare, Aurobindo Pharma, Aster Dm Health, Laurus Labs, Biocon and Torrent Pharma.
Top sectoral holdings: Healthcare and materials
Risk profile: The fund is classified as Very High Risk, reflecting the inherent volatility of the healthcare and pharmaceutical sector. Despite the elevated risk, the fund has delivered a strong mean return of 24.42%, closely tracking the BSE Healthcare TRI (24.92%) and outperforming the broader Equity: Sectoral–Pharma category (23.66%).
From a risk-adjusted performance perspective, the fund stands out with a Sharpe Ratio of 1.25 and a Sortino Ratio of 2.08, both higher than the benchmark (1.12 and 1.74) and category average (1.11 and 1.83).
The fund’s standard deviation of 14.81% is lower than the benchmark (17.05%) and category average (16.03%), suggesting comparatively lower volatility within a high-risk sector.
Nippon India Growth Mid Cap Fund – Direct Plan
The fund was introduced on January 1, 2013, and it has produced an 18.41% return since then. Rupesh Patel is now in charge of managing the fund, which has a 0.62% expense ratio. The fund follows the BSE 150 MidCap TRI as a benchmark.
Top 10 holdings: BSE, Fortis Healthcare, Federal Bank, AU Small Fin Bank, Bharat Forge, Eternal, Info Edge (India), Power Fin., GE Vernova T&D and ICICI Bank.
Top 5 sectoral holdings: Financial, Industrials, Consumer Discretionary, Healthcare and Technology.
Risk profile: The fund is classified as Very High Risk, but it has rewarded investors with a strong mean return of 23.87%, outperforming both the BSE 150 MidCap TRI (20.99%) and the Mid Cap category average (20.78%).
The fund’s standard deviation of 18.11% is broadly in line with the benchmark (18.22%) and category average (18.09%), indicating that its higher returns have not come with significantly higher volatility. Its Sharpe Ratio of 0.99 and Sortino Ratio of 1.33 are notably higher than the benchmark (0.83 and 1.09) and category average (0.82 and 1.08), highlighting superior risk-adjusted and downside risk-adjusted performance.
With a Beta of 0.97, the fund exhibits market sensitivity similar to its benchmark, suggesting that it generally moves in line with broader mid-cap market trends. Additionally, its Alpha of 3.31%, substantially higher than the category average (0.39%), indicates strong excess returns generated through active fund management.
HDFC Mid Cap Fund – Direct Plan
Since its introduction on January 1, 2013, the fund has produced a 20.16% return. Chirag Setalvad is now in charge of managing the fund, which has an expense ratio of 0.62%. The benchmark for the fund is the BSE 150 MidCap TRI.
Top 10 holdings: Max Financial, AU Small Fin Bank, Federal Bank, Balkrishna Ind, Indian Bank, Glenmark Pharmaceuticals, Fortis Healthcare, Ipca Laboratories, Vishal Mega Mart and Cummins India.
Top 5 sector exposure: Financial, Healthcare, Consumer Discretionary, Technology and Consumer Staples.
Risk profile: The fund is classified as Very High Risk. The fund has delivered a mean return of 21.88%, outperforming both the BSE 150 MidCap TRI (20.99%) and the Mid Cap category average (20.78%).
The fund’s standard deviation of 15.93% is significantly lower than both the benchmark (18.22%) and category average (18.09%), indicating lower volatility while generating competitive returns. Its Sharpe Ratio of 1.01 and Sortino Ratio of 1.24 are higher than the benchmark (0.83 and 1.09) and category average (0.82 and 1.08), demonstrating superior risk-adjusted and downside risk-adjusted performance.
With a Beta of 0.85, the fund is less sensitive to market movements than the broader mid-cap sector, and the fund also delivers a strong Alpha of 3.13%, substantially above the category average (0.39%), indicating consistent excess returns generated through active portfolio management.
Edelweiss Mid Cap Fund – Direct Plan
Since its introduction on January 1, 2013, the fund has generated a return of 19.74%. Raj Koradia, Trideep Bhattacharya, and Dhruv Bhatia currently manage the fund. The fund tracks the benchmark BSE 150 MidCap TRI and has an expense ratio of 0.41%.
Top 10 holdings: MCX, Federal Bank, BSE, AU Small Finance Bank, Marico, Fortis Healthcare, Solar, Bharat Heavy Elect, Indian Bank, and Torrent Power.
Top 5 sector exposure: Financial, Industrials, Consumer Discretionary, Materials, and Healthcare.
Risk profile: This mid-cap fund has been classified as very high risk by Value Research. The fund’s mean return of 24.23% is significantly higher than the BSE 150 MidCap TRI (20.99%) and the category average (20.78%), indicating superior return generation over the period of the last 3 years.
Its standard deviation of 17.78% is slightly lower than both the benchmark (18.22%) and category average (18.09%), suggesting the fund’s returns have been less volatile and more consistent. Similarly, the Sortino ratio of 1.29, compared with 1.09 for the benchmark and 1.08 for the category, reflects stronger returns relative to downside risk.
Meanwhile, its alpha of 4.07 is substantially higher than the category average of 0.39, highlighting that the fund manager is outperforming their direct peers by generating better returns relative to the amount of risk taken.
Motilal Oswal ELSS Tax Saver Fund – Direct Plan
Since it was launched on January 21, 2015, this Mutilal Oswal mutual fund has produced returns of 17.41%. Atul Mehra, Ankit Agarwal, Rakesh Shetty, and Ajay Khandelwal are currently managing the fund. The fund’s expense ratio is 0.62%. The fund tracks its benchmark BSE 500 TRI.
Top 10 holdings: MCX, Onesource Specialty Pharma, Zen Technologies, Muthoot Finance, Ather Energy, Waaree Energies, Jain Resource Recycling, PTC, Suzlon Energy and Apar.
Top 5 sectoral exposure: Financial, Industrials, Consumer Discretionary, Materials and Energy & Utilities.
Risk profile: Value Research has classified this fund as very high risk. The fund’s standard deviation of 21.38% is considerably higher than the benchmark (15.41%) and category average (15.53%), indicating that investors have experienced larger fluctuations in returns. The fund has delivered a mean return of 23.93%, significantly outperforming both its benchmark, BSE 500 TRI (13.86%), and the ELSS category average (14.62%) in the last 3 years.
Its Sharpe ratio of 0.84 and Sortino ratio of 1.09 are well above the benchmark’s 0.52 and 0.68, respectively, as well as the category averages of 0.56 and 0.75. The fund’s beta of 1.16 indicates that it is more sensitive to market movements than the average ELSS fund.
One of the standout metrics is the fund’s alpha of 8.80, substantially higher than the category average of 1.06, indicating that the fund has successfully generated higher risk-adjusted returns.
Bandhan Large & Mid Cap Fund – Direct Plan
Since its introduction on January 1, 2013, the fund’s direct plan has produced returns of about 15.71%. Rahul Agarwal and Manish Gunwani are currently managing the fund. The fund’s expense ratio is 0.44%. The fund tracks the BSE Large Mid Cap TRI benchmark.
Top 10 holdings: HDFC Bank, SBI, ICICI Bank, One97 Comm, Axis Bank, Kotak Bank, ICICI Lombard, HDFC AMC, LIC Housing Fin. and Larsen & Toubro.
Top 5 sector exposure: Financial, Industrials, Technology, Healthcare and Energy & Utilities.
Risk profile: Bandhan Large & Mid Cap Fund is classified as a “Very High Risk” fund, but its risk metrics suggest that it has delivered strong returns without taking substantially higher risk than its category. The fund’s mean return of 22.28% is well above both its benchmark, BSE Large Mid Cap TRI (13.15%), and the category average (16.58%).
The fund’s standard deviation of 16.07% is slightly higher than the benchmark’s 14.84% but lower than the category average of 16.62%, indicating that its volatility has remained broadly in line with peers.
Its Sharpe ratio of 1.02 is more than double the benchmark’s 0.49 and substantially above the category average of 0.65, suggesting superior risk-adjusted performance. Whereas the Sortino ratio of 1.34 is above 0.60 for the benchmark and 0.83 for the category, highlighting the fund’s ability to deliver higher returns relative to downside risk.
The fund’s beta of 1.04 is close to the category average of 1.05, indicating that its sensitivity to market movements is broadly similar to that of its peers.
Meanwhile, its alpha of 8.87 significantly exceeds the category average of 3.08, reflecting the fund manager’s investment decisions to generate excess returns compared to the risk taken.
Invesco India Financial Services Fund – Direct Plan
Since its launch on January 1, 2013, this equity fund has produced a return of 15.44%. The fund under the management of Haresh Kapoor and Hiten Jain has an expense ratio of 0.69%. The fund’s benchmark is the BSE Bankex TRI.
Top 10 holdings: HDFC Bank, ICICI Bank, Axis Bank, ICICI Prudential Asset Management, Karur Vysya Bank, MCX, BSE, Shriram Finance, Cholamandalam Inv and Nuvama Wealth Mgmt.
Top sector exposure: Financial and industrial.
Risk profile: This fund is classified as Very High Risk, reflecting its concentrated exposure to the financial services sector. However, it has delivered a strong mean return of 19.03%, significantly outperforming both its benchmark (8.80%) and category average (13.42%).
The fund’s volatility (standard deviation of 15.31%) is broadly in line with the sector. However, its superior Sharpe Ratio (0.86) and Sortino Ratio (1.10) suggest that the fund has generated better risk-adjusted returns compared to peers and the benchmark.
Word of caution
Investors should not assume that previous performance ensures future returns, even though the aforementioned mutual funds have outperformed their benchmarks over one-, three-, five-, and ten-year periods. While investing in mutual funds, investors should look beyond returns and examine factors like their financial goals, their risk appetite, expense ratio, fund manager track record, time horizon, AUM, the fund’s asset allocation, and more.
Past performance should not be the sole criterion for selecting a mutual fund. Investors should always carefully read all scheme-related documents and, if necessary, consult a qualified financial adviser before making investment decisions.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
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