India’s best performing mutual fund schemes for September 2026
India’s best performing mutual fund schemes for September 2026 MUTUAL FUND RETURNS IN SEPTEMBER 2026 – THE BIG PICTURE September was the month when markets reconciled to living with prolonged uncertainty. It is not just that markets…
India’s best performing mutual fund schemes for September 2026
MUTUAL FUND RETURNS IN SEPTEMBER 2026 – THE BIG PICTURE
September was the month when markets reconciled to living with prolonged uncertainty. It is not just that markets have trended lower. Even FPI flows, which had been positive in July and August, turned negative in September. FPIs have sold heavily in equity and debt. Apart form the geopolitical risk from the Middle East, there is a new dimension to risk coming from central banks turning hawkish. Fed just set the ball rolling with its 25-bps rate hike.
September has been tough for equity funds and debt funds for a number of reasons. The US-Iran equation continues to be fluid, while India inflation has touched 4.82%. This raises the possibility of a rate hike in October, and probably, one more in December. The $136 billion FCNR(B) deluge may not have helped the Indian rupee much, but it has surely created a major liquidity problem for the RBI. Also, short-term / long-term bond yield divergence looks likely.
Equity Large Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| Nippon India Large Cap Fund (G) | -5.212% | 11.142% | 13.042% |
| Invesco India Large Cap Fund (G) | 1.295% | 13.457% | 11.391% |
| ICICI Pru Large Cap Fund (G) | -5.663% | 10.635% | 11.039% |
| Category Average | -4.218% | 8.470% | 8.016% |
| Data Source: Morningstar |
Equity Large & Mid Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| Motilal Oswal Large & Mid Cap (G) | 7.436% | 22.234% | 18.787% |
| Invesco India Large & Mid-Cap (G) | 6.461% | 22.437% | 17.119% |
| Bandhan Large & Mid Cap (G) | 3.685% | 18.183% | 17.109% |
| Category Average | 1.298% | 13.099% | 12.162% |
| Data Source: Morningstar |
Equity Multi-Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| Nippon India Multi Cap (G) | -1.976% | 13.515% | 16.870% |
| Mahindra Manulife Multi-Cap (G) | 11.761% | 17.369% | 16.109% |
| ICICI Pru Multi-Cap Fund (G) | 6.230% | 15.514% | 14.735% |
| Category Average | 3.483% | 13.543% | 12.627% |
| Data Source: Morningstar |
Equity Flexi Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| HDFC Flexi Cap Fund (G) | 0.190% | 15.827% | 17.246% |
| BOI Flexi Cap Fund (G) | 9.938% | 19.869% | 16.910% |
| JM Flexi Cap Fund (G) | 0.438% | 15.163% | 15.460% |
| Category Average | 0.586% | 11.406% | 10.528% |
| Data Source: Morningstar |
Equity Mid Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| Motilal Oswal Mid-Cap Fund (G) | -1.334% | 19.547% | 21.397% |
| Invesco India Mid-Cap Fund (G) | 8.463% | 24.276% | 20.007% |
| HSBC Mid-Cap Fund (G) | 18.645% | 24.789% | 19.158% |
| Category Average | 5.964% | 16.067% | 14.901% |
| Data Source: Morningstar |
Equity Small Cap Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| BOI Small Cap Fund (G) | 24.910% | 22.441% | 20.338% |
| Invesco Small Cap Fund (G) | 14.235% | 23.226% | 20.210% |
| Bandhan Small Cap Fund (G) | 9.812% | 25.326% | 20.138% |
| Category Average | 10.581% | 15.697% | 15.972% |
| Data Source: Morningstar |
Dynamic Asset Allocation Funds (BAF)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| HDFC BAF (G) | -0.899% | 11.379% | 14.474% |
| Baroda BNP Paribas BAF (G) | 4.903% | 11.600% | 10.963% |
| ICICI Prudential BAF (G) | 3.688% | 11.280% | 10.810% |
| Category Average | 0.406% | 8.499% | 8.322% |
| Data Source: Morningstar |
Multi-Asset Allocation Funds (MAAF)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| Quant Multi-Asset Fund (G) | 15.672% | 22.646% | 19.911% |
| ICICI Pru Multi-Asset Fund (G) | 3.538% | 14.043% | 15.894% |
| Nippon Multi-Asset Fund (G) | 11.497% | 18.767% | 15.653% |
| Category Average | N.A. | N.A. | N.A. |
| Data Source: Morningstar |
Arbitrage Funds (Cash-Futures)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| Invesco Arbitrage Fund (G) | 6.864% | 7.844% | 7.043% |
| Kotak Arbitrage Fund (G) | 6.771% | 7.492% | 6.924% |
| Edelweiss Arbitrage Fund (G) | 6.701% | 7.426% | 6.881% |
| Category Average | 6.286% | 6.832% | 6.205% |
| Data Source: Morningstar |
Government Securities Funds (Gilt Funds)
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| ICICI Prudential Gilt Fund (G) | 4.473% | 6.987% | 6.420% |
| Bandhan Gilt Fund (G) | 7.606% | 7.891% | 6.362% |
| SBI Gilt Fund (G) | 3.952% | 6.571% | 6.150% |
| Category Average | 3.172% | 6.167% | 5.245% |
| Data Source: Morningstar |
Corporate Bond Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| Nippon India Corporate Bond (G) | 5.433% | 7.533% | 6.771% |
| Axis Corporate Bond (G) | 5.664% | 7.683% | 6.764% |
| ICICI Pru Corporate Bond (G) | 5.922% | 7.400% | 7.734% |
| Category Average | 4.667% | 6.794% | 5.900% |
| Data Source: Morningstar |
Credit Risk Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 22nd Sep-26):
| Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|
| BOI Credit Risk Fund (G) | 17.940% | 10.097% | 27.782% |
| DSP Credit Risk Fund (G) | 11.212% | 16.785% | 13.365% |
| ABSL Credit Risk Fund (G) | 12.632% | 13.086% | 10.869% |
| Category Average | 8.260% | 9.204% | 9.502% |
| Data Source: Morningstar |
Having seen returns for various categories of funds for the year to September 2026, here are some key takeaways for investors.
KEY INVESTOR TAKEAWAYS FROM THE MUTUAL FUND RANKINGS
Here are some key trends we deciphered from the MF rankings for year to September 2026.
In the equity space, large cap funds have seen average long-term returns come down. That is also due to funds shifting to passive alternatives. However, small cap funds and mid-cap funds continue to give above average returns over the last 5 years.
In the debt space, government bond funds have seen returns trend lower due to the spike in the benchmark bond yields. That risk is likely to intensify in the coming weeks due to a possible RBI rate hike in October, followed by another rate hike in December.
In the hybrid space; multi-asset allocation funds (MAAF) have been favoured over Balanced Allocation Funds (BAFs), due to the exposure that MAAFs offer to other classes of assets like gold, silver, REITs, and arbitrage. That combination seems to be still working.
Funds across categories, in the top-3 list, have managed to beat the benchmark index returns over 3-year and 5-year time frames. That is a good sign of alpha creation in the longer term. Over a one-year period, the performance has been less predictable.
Past winners mostly tend to repeat. However, in the recent months, that frequency is reducing. Does that mean that past returns are losing their utility as an indicator of future performance? Not exactly, but investors need a broader strategy.
Instead of just focusing on the top-3 winners, investors must look at the top-5 and use an allocation approach, rather than putting all the eggs in one basket. Past returns are still suggestive; just that investors need to get a little more broad-based in their fund selection!
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