12 Equity Mutual Funds Cross 70% Returns in 3 and 5 Years: What Investors Should Learn From the Numbers

A strong long-term market run has created a striking performance list in India's equity mutual fund universe. According to a September 23, 2026 analysis by ETMutualFunds, 12 equity mutual fund schemes delivered more than 70% absolute returns over both three-year and five-year periods. The analysis covered 218 equity schemes that had completed five years.

But the more important question for investors is not simply which funds produced these returns.

It is this: what can these numbers actually tell us about building a mutual fund portfolio today?

The answer is more nuanced than a simple list of high-performing funds.

What Does a 70% Absolute Return Mean?

An absolute return measures how much an investment has increased over a particular period without converting the gain into an annualised rate.

For example, if ₹1 lakh becomes ₹1.70 lakh, the absolute return is 70%.

That does not mean the fund generated 70% every year.

This distinction is particularly important when comparing mutual funds over three and five years. A fund can generate a 70%+ cumulative gain while its annualised return is considerably lower.

Therefore, investors should not read a headline saying “70% return” as though the fund delivered 70% every year.

The 12 Funds Identified in the Analysis

The ETMutualFunds analysis found 12 schemes that crossed the 70% absolute-return mark in both periods.

Mutual Fund	3-Year Absolute Return	5-Year Absolute Return
Bandhan Small Cap Fund	89.22%	130.97%
Bank of India Small Cap Fund	76.48%	132.50%
Edelweiss Mid Cap Fund	72.41%	119.36%
HSBC Midcap Fund	88.79%	125.57%
ICICI Prudential Mid Cap Fund	77.29%	111.59%
Invesco India Focused Fund	73.83%	88.87%
Invesco India Large & Mid Cap Fund	82.38%	109.00%
Invesco India Midcap Fund	86.38%	132.93%
Invesco India Smallcap Fund	82.16%	136.00%
ITI Small Cap Fund	89.32%	123.92%
Motilal Oswal ELSS Tax Saver Fund	75.50%	110.90%
Motilal Oswal Large & Midcap Fund	78.52%	125.52%

Source: ETMutualFunds analysis.

Small-Cap and Mid-Cap Funds Dominate the List

One of the clearest patterns is the presence of small-cap and mid-cap schemes.

Bandhan Small Cap Fund, Bank of India Small Cap Fund, Invesco India Smallcap Fund and ITI Small Cap Fund are among the small-cap schemes on the list.

Several mid-cap funds also appear, including Edelweiss Mid Cap Fund, HSBC Midcap Fund and ICICI Prudential Mid Cap Fund.

This is significant because smaller companies can offer substantial growth opportunities, but their share prices can also experience larger swings than many large-cap companies.

So, a fund appearing on a high-return list does not automatically mean that the same level of return or volatility should be expected in the future.

Invesco Has Four Funds on the List

Invesco India had the largest representation, with four schemes appearing in the analysis:

• Invesco India Focused Fund
• Invesco India Large & Mid Cap Fund
• Invesco India Midcap Fund
• Invesco India Smallcap Fund

Their five-year absolute returns ranged from 88.87% to 136% in the analysis.

Invesco India Smallcap Fund recorded the highest five-year absolute return among the 12 schemes at 136%.

That means ₹1 lakh invested at the starting point would have grown to approximately ₹2.36 lakh, before considering taxes and other investor-specific factors.

Again, this is a historical illustration rather than a forecast.

ITI Small Cap Fund Led the Three-Year Numbers

Over the three-year period, ITI Small Cap Fund recorded an absolute return of 89.32%, narrowly ahead of Bandhan Small Cap Fund at 89.22%.

HSBC Midcap Fund recorded 88.79%, while Invesco India Midcap Fund delivered 86.38%.

This shows why looking at only one time period can create a very different picture.

A fund that leads over three years may not necessarily lead over five years.

Why Investors Should Not Chase This List

Performance tables can be useful starting points for research, but they have an important limitation: they look backwards.

A fund's past performance reflects the market environment, portfolio decisions and business cycles experienced during that period.

The next three or five years can be very different.

For example, small-cap and mid-cap funds can be affected significantly by changes in valuations, earnings growth, liquidity and investor sentiment.

Therefore, investors should examine more than the headline return.

What Should You Check Before Investing?

A more complete mutual fund evaluation can include:

1. Rolling Returns

Instead of checking only one three-year or five-year period, investors can examine rolling returns to understand how consistently a fund performed across different market periods.

2. Benchmark Performance

A fund's return should be compared with its appropriate benchmark.

A high absolute return becomes more meaningful when investors know how the fund performed relative to the market it was designed to represent.

3. Category Performance

Comparing a small-cap fund with a large-cap fund simply because one generated a higher return may not be meaningful.

Funds should generally be assessed against comparable categories.

4. Downside During Market Corrections

Returns are only one side of the equation.

Investors should also understand how sharply a fund fell during market corrections and how long it took to recover.

5. Portfolio Concentration

Two funds in the same category can have very different portfolios.

The number of holdings, concentration in individual companies and exposure to different sectors can influence the risk profile.

6. Expense Ratio and Other Costs

Costs can affect long-term investor returns. Investors should understand the expense ratio and the difference between available plan options before investing.

SIP Investors Need a Different Perspective

The headline returns in this analysis are absolute returns based on the fund's performance over a period.

A SIP investor's actual return will depend on when each instalment was invested.

For example, an investor who invested ₹10,000 every month over several years would not have all the money invested from the beginning of the measurement period.

Therefore, SIP returns should be evaluated using measures such as XIRR rather than simply applying the fund's headline absolute return to the total amount invested.

Does a High Five-Year Return Guarantee Future Performance?

No.

This is perhaps the most important takeaway from the list.

The 12 funds were identified because they crossed a particular historical performance threshold. The exercise does not establish that these funds will produce the same returns going forward.

ETMutualFunds itself stated that the exercise was not an investment recommendation and that investors should consider their risk appetite, investment horizon and financial goals before making investment or redemption decisions.

The Bigger Lesson for Mutual Fund Investors

The interesting part of this data is not simply that 12 funds generated more than 70% absolute returns.

It is that performance can look very different depending on the period, category and measurement method used.

A fund that appears attractive because of its five-year return may have experienced significant volatility along the way.

Similarly, a fund with a lower historical return may fit a particular investor's portfolio better depending on objectives, time horizon and risk tolerance.

So instead of asking:

“Which fund gave the highest return?”

a more useful question may be:

“What role does this fund play in my portfolio, and am I comfortable with the risk taken to generate its historical returns?”

That shift—from chasing yesterday's winners to understanding portfolio fit—can make mutual fund research more meaningful.

Important Note

The performance figures discussed above are historical figures reported in the ETMutualFunds analysis as of September 23, 2026. Historical returns do not guarantee future performance. Investors should independently evaluate a scheme's objectives, risk, portfolio, costs and suitability before investing. This article is for informational and educational purposes and is not investment advice.