Best High Risk Mutual Funds in India for 2025
High risk mutual funds might come with a significant share of risks when compared to other mutual funds. Apart from the high risk, these mutual funds have showcased higher returns compared to other mutual fund plans. So, if you’re comfortable with taking on more risks in exchange for the potential of higher returns, these funds can be suitable for you. For those seeking a balance, moderate risk mutual funds could be a more stable choice while still aiming for reasonable growth. Let’s have a look at the best options for those aiming higher.
List of Best High Risk High Return Mutual Funds in India
Here is a list of high risk high return mutual funds that you might consider investing in.
| Name | Sub-Category | AUM (in Cr.) | CAGR 3Y (%) | Expense Ratio | SEBI Risk Category |
|---|---|---|---|---|---|
| ICICI Pru Balanced Advantage Fund | Balanced Advantage Fund | 65,710.61 | 14.11 | 0.86 | High |
| ICICI Pru Asset Allocator Fund | FoFs (Domestic) - Hybrid | 27,257.74 | 15.47 | 0.23 | High |
| SBI Conservative Hybrid Fund | Conservative Hybrid Fund | 9,786.61 | 10.64 | 1.08 | High |
| HDFC Credit Risk Debt Fund | Credit Risk Fund | 6,972.32 | 8.28 | 1.01 | High |
| Sundaram Aggressive Hybrid Fund | Aggressive Hybrid Fund | 6,679.69 | 14.07 | 0.69 | High |
| ICICI Pru Credit Risk Fund | Credit Risk Fund | 5,992.90 | 9.06 | 0.76 | High |
| SBI Equity Savings Fund | Equity Savings | 5,702.87 | 11.53 | 1.02 | High |
| UTI ULIP 10Y | Dynamic Asset Allocation Fund | 5,328.83 | 0.00 | 1.01 | High |
| UTI ULIP | Dynamic Asset Allocation Fund | 5,328.83 | 0.00 | 1.01 | High |
| SBI Gold | FoFs - Gold | 5,220.86 | 31.45 | 0.1 | High |
Note: The data on the top high returns mutual funds in India in the list is from 16th September, 2025 and has been derived from the Tickertape Mutual Fund Screener.
- Plan: Growth
- AUM : Sorted from Highest to Lowest
- SEBI Risk Category: High
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Top 10 High Risk Mutual Funds
ICICI Prudential Balanced Advantage Fund
ICICI Prudential Balanced Advantage Fund dynamically shifts allocation between equity and debt based on market conditions. This flexibility enables the fund to capture equity opportunities while mitigating volatility through debt instruments, making it a category recognised for striking a balance between growth and stability.
ICICI Prudential Asset Allocator Fund
ICICI Prudential Asset Allocator Fund invests across multiple asset classes, including equity, debt, and gold ETFs. Its allocation changes according to market trends, offering diversified exposure within a single portfolio and reflecting the growing relevance of multi-asset investing in risk management.
SBI Conservative Hybrid Fund
SBI Conservative Hybrid Fund primarily invests in debt instruments, supplemented by a minor equity component. This allocation structure gives the scheme characteristics more closely aligned with fixed income, with limited participation in equities for potential capital appreciation.
HDFC Credit Risk Debt Fund
HDFC Credit Risk Debt Fund primarily invests in corporate bonds rated below the highest safety levels, aiming to capture higher yields. The strategy carries additional credit risk, as it allocates a notable share to lower-rated instruments for enhanced income potential.
Sundaram Aggressive Hybrid Fund
Sundaram Aggressive Hybrid Fund balances its portfolio by investing predominantly in equities, with the remainder in debt. It aims to combine long-term equity growth with the relative stability of fixed income securities, reflecting the dual nature of hybrid strategies.
ICICI Prudential Credit Risk Fund
ICICI Prudential Credit Risk Fund primarily invests in corporate bonds with lower credit ratings, focusing on higher-yield opportunities. While offering the potential for better returns than safer debt funds, it carries greater exposure to credit events and rating changes.
SBI Equity Savings Fund
SBI Equity Savings Fund follows a three-pronged approach, combining equity, arbitrage, and debt instruments. This blend offers exposure to equities while utilising arbitrage and fixed income to mitigate risks, making it a distinctive category within the hybrid fund space.
UTI ULIP 10Y
UTI ULIP 10Y is a unit-linked insurance plan with a 10-year lock-in period. It combines life insurance coverage with investments across equity, debt, and balanced options, offering policyholders the dual benefit of protection and market participation.
UTI ULIP
UTI ULIP, one of the earlier unit-linked schemes in India, provides investors with exposure to both insurance and investment. The fund allows allocations into equity and debt segments, reflecting a structure where market participation is tied to long-term savings.
SBI Gold Fund
SBI Gold Fund is a fund-of-fund scheme that invests in the SBI Gold Exchange Traded Fund. It provides returns linked to domestic gold prices, offering investors a route to participate in gold as an asset class without directly holding the metal.
What are High Risk Mutual Funds?
High risk mutual funds are investment plans that can carry a greater probability of both significant gains and substantial losses compared to other types of mutual funds. These funds typically invest in assets or securities with higher volatility and potential for larger returns. But they may also come with an increased level of uncertainty and the possibility of losing a significant portion of the invested capital.
Features of High Risk and High Return Mutual Funds
Here is a list of features of potentially very high risk mutual funds.
- Type: Comes in diverse categories, including balanced advantage schemes, credit risk fund schemes, equity hybrid fund schemes, and more.
- Asset Allocation: Invest primarily in stocks or bonds of emerging or growing companies, with the asset allocation tailored to the specific type of high-risk and high-return mutual fund.
- Risk Reward Return Ratio: While high risk high return mutual funds entail substantial volatility, as the name implies, the best ones in 2024 also present significant returns, reflecting a favourable risk-reward ratio.
How to Invest in High Risk High Return Mutual Funds?
You can easily invest in high risk mutual funds by following these steps:
- To invest in high risk high return mutual funds, you can visit an equity investment platform such as smallcase or Tickertape.
- The next step would be to research and identify the top 10 mutual fund schemes among the best low risk funds which aligns with your investment thesis. You can easily select and learn more about the best low risk funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance. Try it now!
- Once you have selected the funds based on different metrics and parameters, go to smallcase.com or the smallcase app, and login via your phone number. Click on ‘Discover‘ and enter the name of the specific mutual fund name in the search bar and hit enter. To start SIP in mutual funds, you can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade model portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered investment experts (also known as smallcase managers)
- smallcase offers over 500+ stock portfolios, created by 200+ managers
Here are a few popular smallcases among new investors:
Disclosures for aforementioned smallcases
Risks Involved While Investing in High Risk Mutual Funds
Investing in high return mutual funds comes with several inherent risks that investors should be aware of:
- Market Volatility: They can be more susceptible to market fluctuations, which can lead to rapid and significant changes in the fund’s value.
- Loss of Principal: The value of high risk investments can decline, and investors may not recover their initial capital.
- Economic Downturn: High risk high return SIP investments in India can be particularly sensitive to economic downturns. Economic challenges can negatively impact the performance of the underlying assets, leading to losses for investors.
- Industry and Sector Risks: Funds focused on specific industries or sectors may be vulnerable to adverse developments in those areas. Concentrated exposure increases the risk if a particular sector faces challenges.
- Liquidity Risks: Some high risk assets may lack liquidity, making it challenging to sell them quickly in the market. This illiquidity can exacerbate losses during turbulent market conditions.
- Interest Rate Risks: High risk funds, especially those holding bonds, are exposed to interest rate risks. These high interest mutual funds can lead to a decline in bond prices, affecting the fund’s overall performance.
- Long-Term Commitment: High risk funds may require a longer investment horizon to weather short-term market fluctuations. Investors should be prepared for a more extended commitment to potentially realise returns.
- Overconfidence Bias: Investors attracted to high risk funds may exhibit overconfidence in their ability to predict future movements.
Benefits of Investing in High Risk and High Return Mutual Funds
Here are some key advantages associated with investing in the best high risk mutual funds.
- Higher Returns: The top high risk mutual funds excel in delivering comparatively higher returns than many other investment options. Debt-based funds, focusing on low-rated bonds, can yield significant returns, while equity-based funds allocate assets to growing companies’ stocks, enhancing the potential for good returns than large-cap funds.
- Long-Term Capital Appreciation: High risk funds demonstrate optimal performance over 5-7 years, making them suitable for achieving long-term financial goals. Additionally, these funds are adept at generating returns that keep pace with inflation.
- Tax Benefits: Investors in higher income tax brackets can enjoy more tax-efficient returns compared to traditional bank fixed deposits. Even when considering high return low risk mutual funds, high-risk funds may offer superior post-tax returns depending on the investor’s financial goals.
- Opportunity to Beat Benchmarks: During positive market cycles, high risk high return funds have the potential to outperform benchmark indices.
- Flexible Investment Modes: Investors can choose between two investment modes – Systematic Investment Plan (SIP) or lump sum. This approach enables individuals to identify high-risk SIPs and determine returns using tools like the Smallcase SIP calculator. In the lump-sum method, individuals invest a specific amount at once.
Taxation on High Risk Mutual Funds as per the Union Budget of 2024-25
The taxation on capital gains from your mutual fund investments is based on their holding periods and asset allocation. A few revisions were made to the tax rates, depending on their types, in the Union Budget 2024-25. It may be important to learn about these revisions when considering high risk mutual funds. These changes include:
Equity Mutual Funds
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 15% | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 10% | 12.50% |
- Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
- Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
- Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.
Debt Mutual Funds
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 36 months | Taxed according to your income tax slab | Taxed according to your income tax slab |
| Long-Term Capital Gains (LTCG) | More than 36 months | 10% | 12.50% |
- No Indexation Benefit: The previous benefit of adjusting the purchase price for inflation is removed. Now, the entire gain after three years is taxable at 12.5%.
- Change in Holding Period for Specified Mutual Funds: Previously, debt mutual funds with a holding period of over 36 months were taxed based on the investor’s tax slab, classified as Long-Term Capital Gains (LTCG). Now, for specified mutual funds where over 65% of the investment is in debt, the holding period for taxation has been reduced to over 24 months. These funds will still be taxed according to the investor’s tax slab as either LTCG or STCG.
Hybrid Mutual Funds
| Type of Hybrid Fund | Short-Term Capital Gains (STCG) | Long-Term Capital Gains (LTCG) | Indexation Benefit |
| Equity-Oriented Hybrid Funds | 20% for holdings less than 1 year | 12.5% for holdings over 1 year, with gains up to Rs. 1.25 lakh tax-free | Not available |
| Debt-Oriented Hybrid Funds | Taxed as per income tax slab for holdings less than 3 years | 12.5% for holdings over 3 years | Not available |
Note: Mutual fund schemes where neither the equity nor debt orientation exceeds 65% will now be classified as long-term investments after 24 months. The previous holding period for these funds was 36 months. These will be taxed at the revised LTCG tax rate of 12.5%.
Factors to Consider Before Investing in High Risk and High Return Mutual Funds
Before investing in the best high risk high return mutual funds, several key factors should be carefully considered:
- Investment Goals: High risk funds may align with goals that involve capital growth and are suitable for investors seeking potentially higher returns over an extended period.
- Risk Tolerance: Assess your risk tolerance and capacity to withstand market volatility. While high CAGR mutual funds involve a higher level of uncertainty and potential for losses, so understanding your comfort level with risk is crucial.
- Time Horizon: Consider your investment time horizon. The best mutual funds for high returns often require a longer holding period to ride out short-term market fluctuations and benefit from the growth potential of the underlying assets.
- Fund Performance: Evaluate the historical performance of the fund. Analyse past returns and compare them with similar funds to gauge consistency and effectiveness in delivering returns over different market conditions.
- Expense Ratio: Understand the expense ratio, which represents the annual fees as a percentage of the fund’s average net assets. Lower expense ratios, especially in low risk mutual funds with high returns, can contribute to higher overall returns.
- Diversification: Examine the fund’s diversification strategy. A well-diversified portfolio can help mitigate risk by spreading investments across different asset classes and sectors.
- Fund Manager Expertise: Assess the expertise and track record of the fund manager. A skilled and experienced fund manager can make strategic decisions to navigate the challenges of high risk high return mutual funds effectively.
To Wrap It Up…
In conclusion, high risk and high return mutual funds present investors with a unique set of opportunities and challenges. While the potential for significant returns exists, it is crucial for investors to approach these funds with a clear understanding of their risk tolerance, investment goals, and the intricacies of the funds themselves. As discussed earlier, the tax implications add another layer of complexity that necessitates careful consideration.
As always, please do your own research and/or consult a financial advisor before investing.
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Frequently Asked Questions (FAQs) on High Risk Mutual Funds
The investment horizon for high risk mutual funds typically ranges from 5 to 10 years or more. Investors should comprehend both the growth potential and challenges before investing in the best high risk mutual funds.
The specific asset allocation will vary depending on the type of high-risk mutual fund, but these funds generally invest in riskier assets with the potential for higher returns.
High risk high return MFs have the potential to offer good returns than lower-risk funds, but they may also come with a higher degree of risk. The returns on high risk mutual funds can vary significantly from year to year, and investors should be prepared for the possibility of losses.
High risk mutual funds can be suitable for investors with a long-term investment horizon and a high risk tolerance. However, these funds might not be appropriate for investors who need to access their money in the short term or who are uncomfortable with the possibility of significant losses.
Some high risk mutual funds have lock-in periods, which means that investors cannot redeem their shares for a certain period of time.
