Best & worst Mutual funds 2025-26

In this post, I will list my findings on which all mutual funds gave me best returns in 2025-26. The list only contains select funds I invested and doesn't cover all options available in the market. I've put small amounts in multiple mutual funds to explore which one gives better returns. This year I plan to consolidate- exit funds which are giving negative returns and less than 5% even after 1 year of holding.

Summary: Only international markets, Gold & Silver gave maximum returns. Gold fund had peaked till 70% return but later crashed- my bad I didn't cash out. There was a crash in April 2025 which wiped out lots of gains and another crash in March 2025 wiped out most of the gains made in 2025-26 period. If your portfolio wasn't showing upwards of 12-15% before Iran war, by end of March it would have turned red.

Gold & Silver: Gold & Silver accidentally spiked in 2025 due to global geopolitical reasons. Now they are half way down from their peak, but still for most of 2026, gold investment would have given much better return than equity. Thus better to invest one portion of your money in gold and silver MF or ETFs whenever they crash by a few %

International Funds: An investment in global markets- China, Europe, USA etc, invested during April market crash post tariff threat- would have given decent returns in 2025-26 compared to domestic mutual funds. Above graphic shares the name and returns I got. Unfortunately I was only experimenting with these funds so had invested a small amount only. 

International funds can't be bought at will. Government has enforced some upper limit as to how much Indian fund houses can invest in overseas funds, hence most fund houses were not accepting any investment for overseas funds for most part of 2025-26. Few accept only SIP (Example Edelweiss US Technology Equity Fund of Fund and Edelweiss US Technology Equity Fund of Fund) . This restriction is apparently to limit outflow of dollar.

Need to watch out if international funds start accepting investments from April as new financial year opens.

Disclaimer: Please note, above is my experience. The exact return depends multiple factors

• Date of your investment (did market crash that day, NAV etc)
• If you redeemed some amount or invested more later 
• Fund specific performance
• Direct (preferred) or Regular Plan 

Also past performance is no guarantee of future returns. April 2025 market crashed across the world due to tariff uncertainty- if you'd put some money when market crashed you would have got decent returns. If you had waited till market recovered and entered when things were priced higher, your portfolio might have tanked much faster. 

Most of domestic mutual funds are at miserable returns- particularly for those who didn't cash out during stock market peak. March 2026 most investments crashed 5-10% easily after US-Iran war. 

• ICICI Prudential Small cap fund: -11% 
• Nippon India large cap fund -3%
• ICICI Prudential Pharma fund - 2%
• Parag Parikh Flexicap fund: -2%
• HDFC Mid cap fund: -10%
• Motilal Oswal Mid cap fund: -14% 

If you had cashed out in Feb before war broke out, you would have saved 10-15%

My tips for max returns on Mutual funds

- Mutual fund managers are supposed to know better than ordinary investors and manage funds better. However I feel they are also equally clueless about market ups and downs. On days Sensex crashed heavily, my equity portfolio has held better than mutual fund portfolio.

- Avoid SIPs if you can manage lumpsum investments when market crashes. Instead of investing fixed amount on a specific day of the month, wait for a day when market crashes 500 to 1000 points or more. On those days invest some money before 3 PM cut off time. This will get you more number of units for same amount, so will increase your returns in long time. SIP is fine if you can't track n plan your investments.

- International funds may give better return than domestic ones

- To make use of 1.25 lakh long term capital gains tax exemption every year, redeem units that are more than 1 year old during Feb/March, reinvest bit later (say when market crashes) into any fund that has been giving better returns 

- Direct plans get you much better NAV and better returns in the long run, Avoid regular plans unless you're guided by an expert insurance advisor. 

- Mutual fund companies keep increasing expense ratio

- Among small cap, mid cap, large cap, I see that large cap & flexicap are giving maximum returns. Small cap is supposed to give good returns in the long run as small cap companies grow into mid cap n large cap. But this is a slow process- may happen, may not happen- if you have patience to hold for 10-15 years give it a try. My small cap investment is down 12% in an year. Mid & large-caps are doing better, even positive. Reason I chose to invest in small-cap mutual fund is that there're too many small cap companies- trying to figure out which one to buy (equity) is lots of work 

Mutual Investment Plan for 2026-27 

• Invest in international funds (USA, Japan, China, Europe) or ETFs 
• Slow down on small cap funds, invest more in sector specific funds (Finance, Pharma, power & infra, Defense etc) 
• Invest in Gold at regular intervals, whenever gold price drops 5%-10% 
• Don't spread your investments across 30-40 funds, Limit to 10-12 max 

Let me know your thoughts...