Top Fast Growing Mutual Funds in India(2026)

India’s mutual fund industry has witnessed extraordinary growth, with total AUM expanding from ₹23.6 lakh cr in 2019 to over ₹80.55 lakh cr in 2025, driven by record SIP inflows, rising financial literacy, and increasing retail participation. Within this rapidly expanding industry, certain fund categories have grown significantly faster than others, driven by strong investor demand, superior return potential, and alignment with powerful structural economic themes. In this article, we explore the meaning, categories, benefits, risks, and key factors to consider when evaluating fast-growing mutual funds in India.

Top Fast-Growing Mutual Funds

Here is a list of the best-performing mutual funds based on 5Y CAGR:

Disclaimer: Please note that the above list of Fast-Growing Mutual Funds is for educational purposes only and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.

Note: The data on the list of best performing mutual funds is from 12th March 2026. This data is derived from the Tickertape Mutual Funds Screener.

• Plan: Growth
• Alpha: High
• 5Y CAGR: Sorted from highest to lowest

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

What Are Fast-Growing Mutual Funds?

Fast-growing mutual funds refer to two distinct but related concepts. First, they describe mutual fund schemes that are growing rapidly in terms of Assets Under Management (AUM), attracting significant new inflows of investor capital driven by strong performance, rising awareness, or thematic relevance. Second, they describe funds that invest in fast-growing companies, businesses with rapidly expanding revenues, earnings, and market share across high-growth sectors of the Indian and global economy. Understanding which funds are growing fastest, and why, helps investors identify categories that attract the most informed capital, generate the strongest returns, and align with the most powerful structural themes in India’s evolving economy.

Overview of Top Fast-Growing Mutual Funds

SBI Children’s Fund – Investment Plan

SBI Children’s Fund Investment Plan is an open-ended solution-oriented equity scheme designed for long-term financial goals related to children. The fund primarily invests in equity and equity-related instruments across sectors. It follows a diversified investment approach and comes with a lock-in period to encourage disciplined long-term wealth creation for future needs.

ICICI Pru Bharat 22 FOF

ICICI Prudential Bharat 22 Fund of Fund invests primarily in units of the Bharat 22 ETF, which tracks the Bharat 22 Index. The portfolio includes large public sector companies across sectors such as energy, finance, and industrials. The fund offers investors exposure to a diversified basket of government-linked companies through a single investment route.

Franklin Build India Fund

Franklin Build India Fund focuses on companies involved in infrastructure and related sectors in India. The portfolio typically includes businesses from capital goods, construction, power, cement, and engineering industries. The fund aims to capture opportunities arising from infrastructure development and long-term economic growth driven by public and private investments.

Sundaram LT Tax Adv Fund – Sr III

Sundaram Long Term Tax Advantage Fund Series III is a close-ended equity-linked savings scheme (ELSS) that offers tax benefits under Section 80C of the Income Tax Act. The fund invests primarily in diversified equity and equity-related instruments across sectors with the objective of long-term capital appreciation during the scheme’s tenure.

Sundaram LT Tax Adv Fund – Sr IV

Sundaram Long Term Tax Advantage Fund Series IV is a close-ended ELSS scheme that provides tax deductions under Section 80C while investing mainly in equity markets. The portfolio typically includes companies across market capitalisations and sectors, with the aim of generating long-term capital growth over the fund’s investment period.

Sundaram LT Micro Cap Tax Adv Fund – Sr VI

Sundaram Long Term Micro Cap Tax Advantage Fund Series VI is a close-ended ELSS scheme focused on micro-cap companies. The fund seeks long-term capital appreciation by investing in emerging businesses with growth potential. Investors also receive tax deductions under Section 80C, subject to the applicable rules and lock-in period.

Sundaram LT Micro Cap Tax Adv Fund – Sr IV

Sundaram Long Term Micro Cap Tax Advantage Fund Series IV invests primarily in micro-cap companies across sectors. Structured as a close-ended ELSS, the scheme offers tax benefits under Section 80C. The fund focuses on identifying smaller companies with strong growth prospects and aims to generate long-term capital appreciation.

Sundaram LT Micro Cap Tax Adv Fund – Sr V

Sundaram Long Term Micro Cap Tax Advantage Fund Series V is a close-ended ELSS scheme investing mainly in micro-cap stocks. The strategy focuses on emerging companies that may benefit from future growth opportunities. The scheme also provides tax deductions under Section 80C along with a mandatory lock-in period.

Sundaram LT Micro Cap Tax Adv Fund – Sr III

Sundaram Long Term Micro Cap Tax Advantage Fund Series III is a close-ended ELSS fund targeting micro-cap companies. The scheme seeks long-term capital appreciation by investing in smaller businesses across sectors. Investors also receive tax benefits under Section 80C, subject to the scheme’s lock-in requirements.

Motilal Oswal Nasdaq 100 FOF

Motilal Oswal Nasdaq 100 Fund of Fund invests primarily in the Motilal Oswal Nasdaq 100 ETF, which tracks the Nasdaq 100 Index in the United States. The portfolio provides exposure to global technology and growth companies, including major firms listed on the Nasdaq exchange through an India-based investment vehicle.

How to Invest in Fast-Growing Mutual Funds?

You can easily start to invest in fast-growing funds by following these steps:

• To invest in the best fast-growing mutual funds, you can visit a mutual fund investment platform such as smallcase.
• The next step is to research and identify the fast-growing mutual funds that match your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
• Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a Fast-Growing mutual fund SIP, and complete the process.

Taxation on Fast-Growing Funds

Understanding the tax treatment of fast-growing mutual funds is essential for accurately estimating post-tax returns and making informed investment decisions. The applicable tax rate depends on two key factors: the type of fund (equity-oriented or non-equity) and the holding period at the time of redemption. Here is a breakdown of how gains from the major fast-growing mutual fund categories are taxed under the current Indian tax framework:

Who Can Consider Investing in Fast-Growing Mutual Funds?

• Aggressive Long-Term Investors: Aggressive long-term investors often track fast-growing equity categories such as small-cap, mid-cap, sectoral, and thematic funds that may offer higher capital appreciation potential over 7–10 year horizons.
• Moderate Risk Investors: Moderate investors frequently analyse multi-asset allocation and flexi-cap funds that provide diversified exposure across asset classes and market capitalisations.
• Tax-Conscious Short-Term Investors: Tax-conscious short-term investors commonly monitor arbitrage funds due to their equity taxation structure and relatively lower risk profile.
• Conservative Investors Seeking Gold Exposure: Conservative investors interested in gold exposure often evaluate Gold ETFs and Gold Fund of Funds as part of their portfolio diversification and inflation-protection strategies.
• Passive and Cost-Conscious Investors: Passive investors focused on cost efficiency typically review ETFs and index funds that track benchmark indices and generally maintain lower expense ratios.

Benefits of Investing in Fast Growing Funds

• High Long-Term Capital Appreciation: Fast-growing equity mutual funds, such as small-cap, mid-cap, and thematic funds, invest in companies at early growth stages. This allows participation in long-term value creation as businesses expand and mature, potentially generating significant capital appreciation over extended investment horizons.
• Alignment with Structural Economic Themes: Many fast-growing mutual fund categories align with long-term economic themes such as defence manufacturing, digital transformation, energy transition, manufacturing growth, and financial inclusion. Sectoral and thematic funds track these structural trends and reflect areas receiving strong policy and economic support.
• Inflation-Beating Returns: Fast-growing equity and multi-asset funds have historically delivered returns above India’s long-term inflation levels. This helps preserve purchasing power over time and allows investors to grow real wealth through long-term participation in equity markets and diversified asset classes.
• Diversification Across Asset Classes and Geographies: Multi-asset allocation funds and overseas fund of funds invest across equity, debt, gold, and international markets. This diversification spreads risk across different asset classes and geographies while exposing portfolios to multiple sources of return.
• Accessibility Through SIP: Investors can access fast-growing mutual funds through Systematic Investment Plans. SIPs allow regular investments in smaller amounts and use rupee cost averaging. This approach spreads investments over time and reduces the risk of entering markets at unfavourable prices.
• Tax Efficiency: Some of the best return mutual fund categories provide tax advantages. Arbitrage funds receive equity taxation while maintaining relatively lower risk. Gold ETFs and multi-asset funds offer tax-efficient exposure compared with physical gold or certain traditional savings instruments.

Risks Associated with Investing in Fast-Growing Funds

• High Volatility in Equity-Oriented Fast-Growing Funds: Small-cap, mid-cap, and sectoral funds often experience high volatility. During market corrections, these funds can see sharp NAV declines and extended periods of weak returns. Investors must recognise that these equity categories fluctuate significantly across different market cycles.
• Concentration Risk in Sectoral and Thematic Funds: Sectoral and thematic funds focus on specific industries such as defence, manufacturing, PSU, or technology. Limited diversification increases risk because negative policy changes, regulatory actions, or earnings slowdowns in that sector can significantly affect fund performance.
• AUM Size Impact on Performance: Rapid inflows into popular funds increase Assets Under Management. In small-cap and mid-cap funds, very large AUM sizes may reduce flexibility. Deploying large capital in less liquid, smaller stocks can become difficult without influencing market prices.
• Currency and Geopolitical Risk in Overseas Funds: International mutual funds investing globally face currency and geopolitical risks. Currency depreciation, global policy changes, or geopolitical tensions can influence returns. These external factors may affect fund performance regardless of how the underlying global companies perform.
• Recency Bias in Fund Selection: Funds that grow rapidly in AUM and recent performance often attract investor attention. However, short-term outperformance does not guarantee future results. Evaluating funds using long-term performance and risk-adjusted returns helps reduce the influence of recency bias.

Factors to Consider Before Investing in Fast-Growing Mutual Funds

• Distinguish Growth from Hype: When evaluating the best return mutual fund, examine whether growth comes from consistent long-term performance or short-term thematic excitement. Funds with strong risk-adjusted returns across multiple market cycles differ significantly from those that attract inflows after a single strong performance year.
• Risk Profile and Category Alignment: The best return mutual fund categories cover a wide risk spectrum, ranging from relatively low-risk arbitrage funds to high-risk small-cap and thematic funds. Investors must understand that AUM growth does not change the underlying risk or volatility of a fund.
• AUM Growth and Performance Sustainability: Rapid increases in AUM can affect fund performance, especially in mid-cap and small-cap funds where liquidity remains limited. Large inflows may reduce the fund manager’s flexibility when deploying capital into smaller stocks without influencing market prices.
• Expense Ratio: Expense ratio directly affects the net returns investors receive. Over long investment periods, even small cost differences compound significantly. Comparing expense ratios across similar funds helps understand the long-term cost impact within the same category.

Conclusion

India’s mutual fund industry is in a historic growth phase, with fast-growing categories, from passive index funds and gold ETFs to multi-asset and small-cap funds, reflecting the evolving sophistication of India’s retail investors. For those looking to go beyond mutual funds, smallcase offers curated, theme-based stock and ETF portfolios, giving investors a more transparent, direct way to invest in India’s fastest-growing sectors and themes.

Frequently Asked Questions About Fast Growing Mutual Funds