5 Mutual Funds With Over 20-25% Returns in the Last 1 Year

Over the past year, equity markets have struggled, with widespread volatility and broader indices delivering negative returns.

Yet not every equity mutual fund has succumbed to the selling pressure. A select group of schemes has significantly outperformed, delivering 20-25% returns despite the challenging environment.

This performance highlights the importance of disciplined portfolio construction, strategic sector allocation, and vigilance in managing market volatility.

In this editorial, we take a close look at five such mutual funds and examine what distinguishes them.

#1 Motilal Oswal Midcap Fund

Motilal Oswal Midcap Fund was launched in February 2014. It's a pure mid-cap scheme which, by regulation, allocates 65% of its assets to mid-cap companies.

As of July 2025, the fund AUM stands at Rs 336.1 billion (bn).

The fund investment strategy is to generate long-term capital growth by investing in quality mid-cap companies with competitive advantages and growth potential.

In line with this label, the 76% weightage of the fund's portfolio is in mid-cap stocks with 21.4% in large-cap stocks and the remaining (2.6%) in debt and cash.

The fund holds a concentrated portfolio of just 18 stocks. The top 10 stocks account for 66.5% of its current portfolio, with Dixon Technology having the highest weight of 10.5%, followed by Coforge (9.4%), Kalyan Jewellers (8.8%), Persistent Systems (8.3%), and Trent (7.8%).

The fund holds 29% of the consumer discretionary sector, followed by technology (26.6%), industrials (16.2%), healthcare (3.7%), and financial (2.6%).

The portfolio turnover ratio of this fund is on the higher side at 142%. However, it is still lower than the category average of 242%.

With this approach, the fund has delivered a rolling return of 34% in the last year ending September. This is double the 17% delivered by Nifty Midcap 150 TRI. It also generates a higher alpha of 8.5%, against the category average of 1.1%.

The fund exhibits slightly higher volatility - standard deviation of 17.3% - compared to the Nifty Midcap 150 TRI, which has a standard deviation of 15.5%.

However, it mitigates the downside risk, as indicated by the Sortino ratio of 0.7, which is similar to the category average of 0.7.

It also outperforms in terms of risk-adjusted returns with a Sharpe ratio of 0.4, versus the category average of 0.3.

#2 Bandhan Small Cap Fund

Bandhan Small-cap Fund was launched in February 2020. It's a small-cap scheme which, by regulation, allocates 65% of its assets to small-cap companies.

As of July 2025, the fund AUM stands at Rs 140.6 bn.

The fund's investment strategy is to generate long-term capital appreciation by investing in high-quality small-cap companies.

In line with this label, the fund allocates 69.7% weightage towards small-cap stocks, 9.3% in mid-cap stocks, and 8.8% in large-cap stocks. The remaining (12%) is cash and cash equivalents.

The fund holds a diversified portfolio of 201 stocks. The top 10 stocks account for 19.1% of its portfolio, with Sobha (3.3%) having the highest weight of, followed by LT Foods (2.3%), South Indian Bank (2.2%), Rural Electrification Corporation (2.1%), and Cholamandalam Financial (1.7%).

The fund holds 21.2% of the financial sector, followed by consumer discretionary (13.6%), healthcare (11.8%), materials (10.6%), and industrials (9.9%).

The portfolio churn is also low at 36%, significantly below than the category average of 110%.

The fund has delivered a rolling return of 32.5% in the last one year, outperforming Nifty Smallcap 250 return of 16.2%. This fund also outperformed its benchmark with an alpha of 6.5%.

The fund exhibits lower volatility, with a standard deviation of 17.7%, compared to the Nifty smallcap 250 TRI, which has a standard deviation of 18.9%.

The fund also manages downside risk better than its peers, with a Sortino ratio of 0.8 compared to the category average of 0.5.

It also outperforms in risk-adjusted returns with a Sharpe ratio of 0.4, versus a category average of 0.2.

#3 Invesco India Focused Fund

Invesco India focused Fund was launched in September 2020. It's a flexicap scheme, which, by regulation, allocates 65% of its assets to equities across market capitalisation.

As of July 2025, the fund AUM stands at Rs 41.4 bn.

The fund's investment strategy is to generate capital appreciation by investing in up to 20 stocks across various market caps.

In line with this label, the company's equity allocation is 97%, and it holds stocks with an average market capitalization of Rs 555.9 bn.

Large-cap stocks accounts for 29% of its portfolio, followed by midcaps and smallcaps (7% each). The fund holds a concentrated portfolio of 20 stocks.

The top 10 stocks account for 62.5% of its current portfolio, with HDFC Bank having the highest weight of 9.3%, followed by ICICI Bank (9.2%), Eternal (6.4%), Interglobe Aviation (6.4%), and ABB (6.1%).

The fund holds 18.5% in private banks, followed by Electrical Components (10.4%), IT Services (8.5%), Retail (6.4%), and Airlines (6.4%).

The portfolio turnover ratio is low at 25%, compared to the category average of 110%.

The fund has delivered a rolling return of 30.9%, outperforming the benchmark return of 14.3%. It also generates a higher alpha of 8.5%, against the category average of 1.4%.

The fund exhibits slightly higher volatility, with a standard deviation of 14.9, compared to the Nifty 500 TRI, which has a standard deviation of 12.8.

However, it mitigates the downside risk, as indicated by the Sortino ratio of 0.7, which is higher than the category average of 0.6.

It also outperforms in risk-adjusted returns with a Sharpe ratio of 0.4, versus a category average of 0.3.

#4 Edelweiss Mid Cap Fund

Edelweiss Midcap Fund was launched in January 2013. It's a pure mid-cap scheme, which by regulation allocates 65% of its assets to mid-cap companies

As of July 2025, the fund AUM stands at Rs 110.2 bn.

The fund's investment strategy is to generate long-term capital appreciation from a portfolio of mid-cap companies' equity and equity-related securities. The fund holds a diversified portfolio of 81 stocks.

The top 10 stocks account for 25.5% of its portfolio, with Max Healthcare having the highest weight of 3.3%, followed by Persistent (3.1%), Coforge (3%), Marico (2.6%), and PB Fintech (2.5%).

The fund holds 29% of the financial sector, followed by industrial (14.5%), consumer discretionary (14.3%), healthcare (10.7%), and materials (10.5%).

The portfolio turnover ratio is low at 43%, which is higher than the category average of 242%.

The fund has delivered a rolling return of 28.6% over the last year, outperforming the Nifty 150 TRI (17.4%). The fund's Alpha stands at 3.7%, showing outperformance against the benchmark and category average of 1.1%.

The fund exhibits similar volatility to the benchmark, with a standard deviation of 15.9%, compared to the Nifty Midcap 150 TRI (15.5%).

However, it mitigates the downside risk well, with a Sortino ratio of 0.7, which is similar to the category average of 0.7.

It also outperforms in risk-adjusted returns with a Sharpe ratio of 0.4, versus a category average of 0.3.

#5 Invesco India Midcap Fund

Invesco India Midcap Fund, launched in April 2007, is a mid-cap scheme with a dynamic asset mix, balancing equity, cash, and limited debt exposure.

As of July 2025, the fund AUM stands at Rs 78 bn.

The fund's investment objective is to generate capital appreciation by investing in mid-cap companies. It invests in firms ranked between 101 and 250 by market capitalization.

As a mid-cap fund, it is mandated to allocate 65% of its assets to mid-cap companies.

In line with this label, the fund allocates 54.7% weightage towards mid-cap stocks, 7.2% in small-cap stocks, and 37.5% in large-cap stocks.

The remaining (1.9%) is cash and cash equivalents. The fund holds a diversified portfolio of 48 stocks. The top 10 stocks constitute 41% of its current portfolio, with BSE having the highest weightage of 4.7%, followed by Glenmark Pharma (4.6%), Swiggy (4.5%), L&T Finance (4.4%), and Prestige Estate (4.2%).

The fund holds 29.4% of the financial sector, followed by healthcare (19.7%), consumer discretionary (12.8%), technology (11.8%), and real estate (7.8%).

The fund does not engage in frequent buying and selling, as indicated by its portfolio turnover ratio of 40%, which is lower than the category average of 242%.

The fund has delivered a rolling return of 31.4%, outperforming the benchmark's return of 17.4%. The fund generates an Alpha of 4.7%.

The fund shows slightly higher volatility with a standard deviation of 16.3%, compared to the category average of 15.5%.

However, it compensates with a better Sortino ratio of 0.8, compared to the category average of 0.7.

It also outperforms in risk-adjusted returns with a Sharpe ratio of 0.4, versus a category average of 0.3.

Conclusion

In a year when volatility tested most portfolios, these funds demonstrated resilience by limiting losses and managing risks more effectively than their peers.

While short-term performance alone should not drive decisions, their ability to stay steady highlights the importance of discipline, diversification, and thoughtful portfolio construction.

Happy investing.

Disclaimer: This write-up is for information purposes and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme-related documents carefully. Registration granted by SEBI, Membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.