For most retail investors in India, the belief has always been that investing directly in stocks is the only way to double their money quickly. But recent trends prove otherwise—mutual funds too have delivered extraordinary returns. In fact, in the past three years, several mutual funds have doubled investors’ money, providing more than 100% returns in a relatively short span of time.

According to data, the performance of nearly 233 equity mutual funds was tracked over the last three years. Out of these, seven funds stood out by doubling investors’ wealth, while the majority of others delivered returns ranging from 6% to 90%. This clearly highlights that with the right fund selection, investors can generate substantial wealth even in mutual funds.

The Top 7 Funds That Doubled Investors’ Money

1. Bandhan Small Cap Fund

   • 3-Year Return: 117%

   • CAGR: 29.59%

   • Investment Growth: ₹1 lakh invested three years ago would now be worth around ₹2,17,000.

2. Invesco India Midcap Fund

   • 3-Year Return: 111%

   • CAGR: 28.16%

   • Investment Growth: ₹1 lakh became ₹2,11,000.

3. Motilal Oswal Midcap Fund

   • 3-Year Return: 109%

   • CAGR: 28%

   • Investment Growth: ₹1 lakh became ₹2,09,000.

4. ITI Small Cap Fund

   • 3-Year Return: 104%

   • CAGR: 26.88%

   • Investment Growth: ₹1 lakh became ₹2,04,000.

5. Motilal Oswal Large & Midcap Fund

   • 3-Year Return: 103%

   • CAGR: 26.62%

   • Investment Growth: ₹1 lakh became ₹2,03,000.

6. Invesco India Small Cap Fund

   • 3-Year Return: 101%

   • CAGR: 26.18%

   • Investment Growth: ₹1 lakh became ₹2,01,000.

7. HDFC Midcap Fund

   • 3-Year Return: 100%

   • CAGR: ~26%

   • Investment Growth: ₹1 lakh became ₹2,00,000.

Clearly, small-cap and mid-cap funds have outperformed the broader mutual fund industry in the past three years.

Key Insights for Investors

• High Returns Come with High Risk:
  While small-cap and mid-cap funds delivered phenomenal returns, they also carry higher risk. These funds can rise sharply during bullish phases but can also fall steeply during downturns.

• Past Performance ≠ Future Guarantee:
  The last three years have been exceptional for the equity markets. But investors must note that past performance is not an assurance of future returns. Market cycles include both bull runs and bear phases.

• Right Strategy Matters:
  Investors must adopt a balanced and disciplined approach when investing in mutual funds. A few important steps include:

  • Assess your risk appetite before investing.

  • Prefer SIP (Systematic Investment Plan) over lump-sum investments to benefit from rupee cost averaging.

  • Avoid putting all money into small-cap or mid-cap funds; diversify with large-cap funds as well.

  • Keep a minimum investment horizon of 5–7 years for equity funds.

  • Beginners may start with hybrid or balanced funds before moving to pure equity funds.

  • Build an emergency fund before investing in equities.

  • Use only surplus money for equity investments.

  • Do regular portfolio reviews, but avoid frequent changes.

The Bottom Line

The last three years have been outstanding for the mutual fund industry, particularly in the small-cap and mid-cap space, where investors’ money more than doubled. However, it is equally important to remember that where there are higher returns, there is higher risk as well.

The real smart investing strategy is not to chase short-term high returns but to build a balanced, long-term portfolio with the right mix of funds. This way, investors can benefit from both wealth creation and risk management.

So, are you considering investing in mutual funds, or are you already a mutual fund investor? Share your thoughts in the comments below!