Indian equities have gone through sharp ups and downs in the last 5 years – from the post-pandemic rally to inflation shocks, global interest rate hikes and geopolitical tensions. Yet, despite this, some equity fund categories, including thematic/sectoral funds, have managed to deliver stellar returns to investors.
A closer look across different time frames – from as short as 3 months to as long as five years – shows that commodity-linked funds such as gold and silver have clearly dominated on the returns front. Within equities, however, select sectoral themes have seen a strong run due to the government’s policy push and structural growth trends.
Among the wide universe of sectoral and thematic/sectoral funds, categories such as PSU, pharma, auto and transportation, manufacturing, infrastructure, and energy have emerged as consistent performers across multiple periods. That said, not all themes have delivered equally, and timing has played a critical role in investor outcomes.
In this story, we narrow the focus to the top three thematic mutual fund categories only that have stood out across 3-year, 5-year, and 10-year periods, based on performance consistency and broader market relevance, and also the top 3 winners from each best-performing category.
Top-performing thematic mutual fund categories across 3, 5 and 10 years
The data below shows that thematic PSU mutual funds have emerged as the strongest long-term performers over both the 3-year and 5-year periods, while Infrastructure funds have also delivered consistently strong returns. Over the 10-year period, however, Infrastructure funds narrowly edged ahead.
Overall, the performance indicates that thematic PSU funds have been the clear winners over the past three and five years, whereas Infrastructure funds have demonstrated the strongest long-term consistency over 10 years.
| Thematic fund categories | 3-Year Returns In % | Benchmark Returns In % | 5-Year Returns In % | Benchmark Returns In % | 10-Year Returns In % | Benchmark Returns In % |
| Thematic PSU | 25.72 | 27.69 | 24.31 | 26 | 15.66 | 15.64 |
| Thematic manufacturing | 20.32 | 13.94 | 16.88 | 14.84 | 13.71 | 13.58 |
| Thematic infrastructure | 20.28 | 26.72 | 19.83 | 23.11 | 15.95 | 16.79 |
Source: Value Research as of 5th July 2026
Top-performing thematic PSU funds
3-year performance
| Funds | 3-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| SBI PSU Fund – Direct Plan | 28.17 | 27.69 | 26.16 |
| ABSL PSU Equity Dir | 26.25 | 27.69 | 26.16 |
| ICICI Pru PSU Equity Dir | 25.32 | 27.69 | 26.16 |
5-year performance
| Funds | 5-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| ABSL PSU Equity Dir | 24.52 | 26 | 23.98 |
| SBI PSU Fund – Direct Plan | 24.38 | 26 | 23.98 |
| Invesco India PSU Equity Dir | 23.04 | 26 | 23.98 |
10-year performance
| Funds | 10-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| Invesco India PSU Equity Dir | 18.11 | 15.64 | 16.67 |
| SBI PSU Dir | 15.24 | 15.64 | 16.67 |
Source: Value Research as of 5th July 2026
Top-performing thematic infrastructure funds
3-year performance
| Funds | 3-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| LIC MF Infrastructure Dir | 28.55 | 26.72 | 21.71 |
| DSP India T.I.G.E.R. Dir | 26.22 | 26.72 | 21.71 |
| Bank of India Manufacturing & Infra Dir | 26.12 | 26.72 | 21.71 |
5-year performance
| Funds | 5-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| LIC MF Infrastructure Dir | 25.36 | 23.11 | 21.14 |
| ICICI Pru Infrastructure Dir | 25.16 | 23.11 | 21.14 |
| DSP India T.I.G.E.R. Dir | 24.3 | 23.11 | 21.14 |
10-year performance
| Funds | 10-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| Quant Infrastructure Dir | 21.31 | 16.79 | 17.2 |
| Bank of India Manufacturing & Infra Dir | 19.96 | 16.79 | 17.2 |
| Invesco India Infrastructure Dir | 19.93 | 16.79 | 17.2 |
Source: Value Research as of 3rd July 2026
Top-performing thematic manufacturing funds
3-year performance
| Funds | 3-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| ICICI Pru Manufacturing Dir | 23.31 | 13.94 | 21.4 |
| ABSL Manufacturing Equity Dir | 21.44 | 13.94 | 21.4 |
| Kotak Manufacture in India Dir | 21.43 | 13.94 | 21.4 |
5-year performance
| Funds | 5-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| ICICI Pru Manufacturing Dir | 21.07 | 14.84 | 17.99 |
| ABSL Manufacturing Equity Dir | 14.9 | 14.84 | 17.99 |
10-year performance
| Funds | 10-Year Returns In % | Benchmark Returns In % | Category Average Returns In % |
| ABSL Manufacturing Equity Dir | 14.75 | 13.58 | 14.75 |
Source: Value Research as of 3rd July 2026
Word of caution
While the above thematic mutual funds have delivered impressive returns in certain periods, investors should remember that these schemes are concentrated around a single sector, hence are more volatile than diversified funds.
Thematic funds generally carry Very High Risk, according to Value Research, and because of the single industry exposure, these funds can experience sharper ups and downs based on the performance of that specific category.
The categories leading the performance charts today may not remain at the top in the coming years, due to varying market conditions; hence, chasing thematic funds only based on past performance without considering your risk profile, goals, risk and asset classes, portfolio diversification, and expense ratios may expose investors to higher volatility.
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.
Every financial journey has a turning point. What’s yours?
Financial Express is launching a new series highlighting real experiences with money, investments, and the taxman. Did a sudden tax rule catch you off guard? Did a piece of financial advice change your life? Your story could provide invaluable, practical lessons for thousands of fellow taxpayers. Share your experience with us. We respect your privacy: no stories will be featured without a direct conversation and your full consent. Thank you.