Top Performing Mutual Funds – List of Equity, Debt & Hybrid Funds (2026)

Mutual funds effectively invest in the capital markets, combining equity, debt, and hybrid funds. However, identifying the right mutual funds can be challenging. This article aims to list the best mutual funds in equity, debt, and hybrid categories based on their AUM. It will also explore the features, factors, and how to invest in these top mutual funds in India.

Top 10 Best Mutual Funds 2026 (Equity, Debt & Hybrid Funds)

Top 10 Equity Mutual Funds

Here is a list of the top 10 long term equity mutual funds.

Note: The data on the list of best mutual funds in India is from 12th May 2026. It is derived from the Tickertape Mutual Funds Screener.

🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

Top 10 Hybrid Mutual Funds

Here is a list of the best hybrid mutual funds.

Note: The data on the list is from 12th May 2026. It is derived from the Tickertape Mutual Funds Screener.

🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

Top 10 Debt Mutual Funds

Here is a list of top 10 debt mutual funds.

Note: The data on the top mutual funds list is from 12th May 2026. It is derived from the Tickertape Mutual Funds Screener.

🚀 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 Best Mutual Funds (Equity, Hybrid & Debt)

Equity Mutual Funds: An Overview

Here are brief overviews of the best equity mutual funds to invest, listed above: 

1. Parag Parikh Flexi Cap Fund: A diversified equity fund investing across market caps and geographies, known for its unique global allocation and value-driven, long-term investment philosophy, with no sector or cap restrictions.
2. HDFC Flexi Cap Fund: HDFC Flexi Cap Fund is an open-ended equity fund with full flexibility to invest across large-, mid-, and small-cap stocks, dynamically managed to capture opportunities across market segments, benchmarked against the Nifty 500 TRI.
3. HDFC Mid Cap Fund: HDFC Mid Cap Fund focuses on mid-sized companies ranked 101st–250th by market cap, using a bottom-up, research-driven stock-picking approach to target India’s emerging growth businesses for long-term capital appreciation.
4. ICICI Pru Large Cap Fund: ICICI Pru Large Cap Fund is a stability-focused fund mandated to invest at least 80% in the top 100 companies, targeting long-term capital appreciation and income distribution for conservative equity investors.
5. Nippon India Small Cap Fund: Nippon India Small Cap Fund targets high-growth small-cap companies with quality management and reasonable valuations, viewing small-caps as potential mid-caps of tomorrow, offering high growth at relatively lower valuations.
6. Kotak Midcap Fund: Kotak Midcap Fund is an open-ended equity scheme investing in companies ranked 101st–250th by market cap, employing a diversified, research-driven, bottom-up stock selection strategy for long-term capital growth.
7. ICICI Pru Value Fund: ICICI Pru Value Fund is a contrarian, value-style fund that seeks stocks trading below their intrinsic value, combining capital appreciation and dividend income across a well-diversified portfolio of undervalued equities.
8. Kotak Flexicap Fund: Kotak Flexicap Fund is a dynamic equity scheme with unconstrained allocation across large-, mid-, and small-cap stocks, adjusting its portfolio mix based on market conditions and valuations to capture evolving opportunities.
9. SBI Large Cap Fund: SBI Large Cap Fund is one of India’s most widely held large-cap funds, investing in well-established blue-chip companies with broad sectoral diversification and stability, making it well-suited for conservative long-term investors.
10. Nippon India Multi Cap Fund: The fund is mandated to invest at least 25% each in large-, mid-, and small-cap stocks, focusing on sectors driven by India’s economic reforms, FDI inflows, and infrastructure development.

Hybrid Mutual Funds: An Overview

Here are brief overviews of the hybrid type of mutual fund

1. HDFC Balanced Advantage Fund: HDFC Balanced Advantage Fund is a dynamic asset allocation fund that adjusts equity exposure based on market valuations using a counter-cyclical strategy, increasing equity during downturns and reducing it during rallies, with the remainder invested in debt instruments.
2. ICICI Pru Multi-Asset Fund: ICICI Pru Multi-Asset Fund stands out for its multi-asset diversification, investing across equity, debt, gold, silver, and other asset classes. It aims to generate capital appreciation while managing risk through broad diversification beyond traditional equity and debt.
3. SBI Equity Hybrid Fund: SBI Equity Hybrid Fund is an aggressive hybrid fund that invests 65–80% in a diversified portfolio of high-growth equities and the balance in fixed income securities, targeting long-term capital appreciation while using debt to manage portfolio risk.
4. ICICI Pru Balanced Advantage Fund: ICICI Pru Balanced Advantage Fund dynamically manages its mix of equity and fixed income securities based on market outlook, using equity derivatives strategies and the best arbitrage funds opportunities to provide capital appreciation and income distribution.
5. Kotak Arbitrage Fund: Kotak Arbitrage Fund generates returns by exploiting price differentials between cash and derivatives markets. It invests the balance in debt and money market instruments, offering equity-like tax treatment with debt-like risk, making it tax-efficient for short-term parking.
6. ICICI Pru Equity & Debt Fund: ICICI Pru Equity & Debt Fund is an aggressive hybrid fund investing 65–80% in equities and 20–35% in bonds. It seeks long-term capital appreciation and current income through a well-diversified portfolio of equities and fixed income securities.
7. SBI Arbitrage Opportunities Fund: SBI Arbitrage Opportunities Fund generates income by investing in equity shares and derivatives, exploiting price differentials between stocks and their futures. The remaining assets are deployed in debt and money market instruments for stability.
8. SBI Balanced Advantage Fund: SBI Balanced Advantage Fund is a dynamic asset allocation fund that adjusts its equity-debt mix based on prevailing market conditions. It aims to deliver long-term capital appreciation while limiting downside risk through systematic rebalancing across asset classes.
9. ICICI Pru Equity-Arbitrage Fund: ICICI Pru Equity-Arbitrage Fund generates income by exploiting arbitrage opportunities across cash and derivatives markets. It invests in equity, futures, and high-quality debt instruments, offering a low-risk profile with equity-oriented tax efficiency.
10. Invesco India Arbitrage Fund: Invesco India Arbitrage Fund capitalises on price differences between cash and derivatives markets to generate income. Surplus cash is deployed in fixed income instruments, making it a low-risk, tax-efficient option for investors with a short-to-medium-term horizon.

Debt Mutual Funds: An Overview

1. SBI Liquid Fund: SBI Liquid Fund is one of India’s most trusted liquid funds, investing in high-quality, short-term money market instruments. It offers competitive returns with high liquidity, making it ideal for parking surplus cash or building an emergency corpus.
2. HDFC Liquid Fund: HDFC Liquid Fund is a well-established scheme with a consistent long-term track record, investing predominantly in AAA-rated papers and sovereign securities. It offers low risk, high liquidity, and a low expense ratio for short-term financial goals.
3. ICICI Pru Liquid Fund: ICICI Pru Liquid Fund is a top-performing liquid fund offering consistent returns with low volatility. It maintains a strong portfolio of high-credit-rated instruments, ensuring stability and quick access to funds for short-term investors.
4. Axis Liquid Fund: Axis Liquid Fund is an open-ended liquid scheme that provides a high level of liquidity with reasonable returns at low risk. It invests primarily in money market instruments such as certificates of deposit, treasury bills, and commercial papers.
5. Aditya Birla SL Liquid Fund: Aditya Birla SL Liquid Fund seeks to provide high liquidity and safety with reasonable returns through investments in high-quality debt and money market instruments, making it well-suited for short-term cash management needs.
6. Nippon India Liquid Fund: Nippon India Liquid Fund is a low-risk debt fund investing in short-term, high-quality money market securities. It delivers consistent returns with easy liquidity, making it a reliable option for parking idle money over the short term.
7. Tata Money Market Fund: Tata Money Market Fund invests in high-quality, short-term money market instruments with maturities up to one year. It focuses on capital preservation, liquidity, and stable returns through prudent portfolio management and low interest rate risk.
8. SBI Savings Fund: SBI Savings Fund aims to deliver stable income and high liquidity by investing in money market and short-term debt instruments. It maintains low volatility while offering consistent returns, suited for conservative, short-term investors.
9. Kotak Money Market Fund: Kotak Money Market Fund is an open-ended debt scheme investing in money market instruments with maturities up to one year. It is uniquely positioned to reduce interest rate risk by predominantly investing in floating rate securities and money market instruments.
10. Kotak Liquid Fund: Kotak Liquid Fund is an open-ended liquid scheme investing in high-quality, short-term instruments such as commercial paper, certificates of deposit, treasury bills, and government securities, offering reasonable returns with high liquidity and low risk.

What are the Best Mutual Funds?

Mutual funds are categorised by their underlying assets: equity, debt, or hybrid. Equity mutual funds, debt mutual funds, and hybrid funds have unique risk profiles and investment goals. Choose a mutual fund based on your investment goals, risk tolerance, and horizon.

Equity mutual funds might be suitable for long-term goals, such as retirement savings in 20 years. Equity funds include sub-categories like large-cap, mid-cap, and small-cap funds, each offering different risk levels. Large-cap funds focus on financially strong market leaders and are generally more resilient during economic downturns than small-cap funds, which invest in smaller companies and carry higher risks. For short-term goals, equity funds might be too volatile. In such cases, debt mutual funds, which are less volatile, could be a better choice. So, it all comes down to you as an investor and your investment objectives. Funds that suit the investors’ investment goals and risk tolerance emerge as the best mutual funds for that particular investor.

How to Invest in the Best Mutual Funds in India?

You can easily invest in mutual funds by following these steps:

• To invest in India mutual funds, you can visit an equity investment platform such as smallcase or Tickertape.
• The next step would be to research and identify the best MF to invest in which aligns with your investment thesis. You can easily select and learn more about the best mutual 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 best 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. You can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!

Features of the Best Mutual Funds

Here are a few key features that the best mutual funds may exhibit:

• Diversification: Mutual funds spread investments across multiple securities and asset categories, lowering risk compared to direct equity investing.
• Professional Management: Experienced fund managers actively manage mutual funds, ensuring they monitor and adjust investments to meet objectives.
• Transparency: Each mutual fund provides a Scheme Information Document detailing holdings and fund manager information. Investors can track their portfolio’s mutual fund performance with daily NAV updates.
• Liquidity: Investors can redeem investments on any business day and typically receive funds in 1-3 days. Some funds, like ELSS, have specific lock-in periods.
• Tax Efficiency: ELSS investments qualify for tax benefits under section 80C, and longer-term mutual fund investments can also be tax-efficient.
• Cost-effectiveness: Mutual funds, including the top 10 mutual funds, pool investments, enabling access to diverse portfolios at lower costs than individual investments. This structure benefits from economies of scale, reducing expenses like brokerage fees.
• Returns: While not guaranteed and subject to market fluctuations, equity mutual funds historically offer potential for double-digit annual returns over the long term. Debt funds can also provide higher mutual fund returns than traditional bank deposits.
• Regulation: SEBI regulates India’s mutual fund industry, ensuring adherence to stringent regulations that protect investors, manage risks, ensure liquidity, and maintain fair valuation practices.

How to Identify the Best Mutual Funds?

Here are some additional tips for identifying the best mutual funds:

• Track Record: Assess the fund’s performance over the last three to five years, particularly during market downturns. Top-performing funds consistently outperform their benchmarks and peers.
• Financial Ratios: Evaluate ratios like alpha and beta to gauge performance against peers. Alpha indicates the manager’s added returns compared to the benchmark, while the Sharpe ratio measures risk-adjusted returns.
• Expense Ratio: Analyse the fee charged by fund houses, deducted from returns. A lower expense ratio enhances investor returns, ensuring costs are reasonable and compliant with regulatory limits.
• Fund History and Manager Performance: Consider the fund’s longevity and manager’s track record. Long-term performance data and a skilled fund manager are crucial indicators of potential returns.

These parameters help in making informed investment decisions aligned with financial objectives and risk tolerance. However, it is important to remember that past performance does not guarantee future results.

Taxation on Mutual Funds as per the Union Budget for 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 the best mutual funds for investment. These changes include:

Equity Mutual Funds

Debt Mutual Funds

Hybrid Mutual Funds

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%.

Advantages of Investing in the Top Performing Mutual Funds

When you invest in well-regarded mutual funds, you’re tapping into several practical advantages:

• Expert Money Management: Fund managers with years of market experience handle your money, backed by research teams who identify promising investment opportunities. This means you don’t need to become a stock market expert yourself—the professionals handle security selection and portfolio construction.
• Regular Small Investments: Through SIPs (systematic investment plans), you can start with amounts as modest as Rs 100 per month. There’s no need to wait until you’ve accumulated a large sum—you can begin building your portfolio incrementally.
• Diversification: Rather than putting all your eggs in one basket, mutual funds spread your investment across multiple securities. This happens automatically, without you needing to track dozens of individual holdings.
• Liquidity: Most mutual funds operate on an open-ended basis, meaning you can redeem your units whenever necessary. This flexibility provides peace of mind if you need funds unexpectedly.
• Regulation: India’s mutual fund industry operates under the watchful eyes of SEBI, RBI, and AMFI. These regulatory bodies establish standards that protect investor interests.
• Tax Benefits: If you’re looking to reduce your tax burden, ELSS (Equity Linked Savings Scheme) funds qualify for deductions under Section 80C of the Income Tax Act, 1961. Depending on your tax bracket, this could save you up to Rs 46,800 annually.

Risk Possessed by Best Mutual Funds

• Market Risk: Broader economic events like natural disasters, viral outbreaks, or political instability can drag down market performance, regardless of individual company fundamentals.
• Concentration Risk: When a fund puts too much weight on a single company or sector, problems in that area get magnified. A downturn in that concentrated position can amplify your losses significantly.
• Interest Rate Risk: Changes in interest rates affect security valuations. When rates shift, certain investments may lose value during your holding period, impacting overall returns.
• Liquidity Risk: Sometimes finding buyers for specific securities becomes difficult without accepting a steep discount. This can make it challenging to sell positions when needed.
• Credit Risk: There’s always a chance that bond issuers might struggle to pay interest or return principal as promised. Credit ratings help identify these risks upfront, though they’re not infallible.

Factors to Consider Before Investing in the Best Mutual Funds

Before committing money to any mutual fund, think through these elements:

• Assess Your Investment Horizon: How many years until you’ll need this money? Longer investment horizons generally allow you to ride out market volatility more comfortably and potentially capture better returns. That said, this isn’t guaranteed—always conduct your own research or consult a financial advisor before making decisions.
• Review Past Performance: Look at how the fund has performed relative to its benchmark index and peer funds. While history doesn’t predict the future, it reveals patterns in how the fund navigates different market conditions.
• Evaluate Fund Manager Experience: Who’s making the investment decisions, and what’s their track record? Consistent performance over multiple market cycles matters more than one stellar year. Their qualifications and management style play a crucial role in fund outcomes.
• Understand Net Asset Value (NAV): NAV shows what each fund unit is worth in the market. Funds with higher NAVs may appear costlier, but this doesn’t necessarily indicate better or worse prospects—it primarily reflects the fund’s history and current portfolio composition.
• Determine Your Risk Tolerance: Different mutual funds carry different risk profiles. Be honest with yourself about how you’d react if your investment dropped significantly in a short period. If that keeps you up at night, stick with more conservative options that match your comfort level.
• Know Exit Loads: Some funds charge penalties, called exit loads, if you withdraw within a certain timeframe. These fees can eat into your returns, so understand the terms before investing to avoid unexpected costs down the road.

To Wrap It Up…

Investing in the best mutual funds may offer several advantages, as listed above. Mutual funds are convenient and accessible for wealth creation, helping to build a diversified investment mutual fund portfolio and manage risks while aiming for higher returns. However, it’s crucial to remember that mutual funds involve market risks, so your investment decisions should align with your risk tolerance and financial goals. Consulting a financial advisor can provide valuable guidance in making informed investment choices.

Frequently Asked Questions (FAQs) on the Best Mutual Funds