Best Equity Mutual Funds to Invest in India 2025

Equity mutual funds are among the most popular investment choices for individuals looking to grow wealth over the long term. These funds aim to generate returns by investing in stocks of publicly listed companies across large-cap, mid-cap, and small-cap segments. As per SEBI guidelines, equity mutual funds must allocate at least 65% of their assets in equities and equity-related instruments, making them suitable for long-term capital appreciation.

If you’re searching for the best equity mutual fund or exploring the best mutual funds 2025 has to offer, this guide will help you understand top-performing options, who should invest, and what factors to consider before diving in.What are Equity Mutual Funds?

Equity mutual funds pool money from investors to purchase shares of various companies. These can be sectoral/thematic, large-cap, mid-cap, or small-cap based on the investment strategy. The remaining portion (up to 35%) of the fund can be invested in money-market or debt instruments for stability and liquidity.

The performance of an equity fund depends on the fund manager’s expertise, market conditions, and asset allocation strategy. While they come with a higher level of risk, they also offer potentially higher returns, especially when held over a long investment horizon.

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Best Equity Mutual Funds in India 2025

Below is a curated list of top-rated equity mutual funds based on 3-year returns and Value Research ratings. These funds have consistently outperformed their peers and are ideal for SIP (Systematic Investment Plan) investors looking to grow their money.

Equity Mutual Fund Table

Fund Name	Category	3-Year Return	AUM (Cr)	Type
Invesco India PSU Equity Fund	Sectoral/Thematic	38.32%	₹1,438.55	Regular
Invesco India PSU Equity Fund Direct Plan IDCW (Payout)	Sectoral/Thematic	38.29%	₹1,438.55	Direct
SBI PSU Fund	Sectoral/Thematic	37.89%	₹5,427.44	Regular
SBI PSU Fund Direct Plan IDCW Reinvestment	Sectoral/Thematic	37.89%	₹5,427.44	Direct
Bandhan Small Cap Fund	Small Cap	35.95%	₹12,981.57	Regular
Bandhan Small Cap Fund Direct IDCW Payout	Small Cap	35.82%	₹12,981.57	Direct
Aditya Birla Sun Life PSU Equity Fund	Sectoral/Thematic	35.61%	₹5,687.15	Regular
Aditya Birla Sun Life PSU Fund Direct Payout IDCW	Sectoral/Thematic	35.58%	₹5,687.15	Direct

Who Should Invest in Equity Mutual Funds?

Investing in the best equity mutual funds in 2025 may be ideal for the following types of investors:

a) Investors with Moderate to High-Risk Appetite

These funds experience short-term market volatility. If you’re comfortable with some risk and seeking long-term wealth creation, equity funds are for you.

b) Small or First-Time Investors

With SIPs starting as low as ₹100, investors can start small and steadily increase their equity exposure.

c) Tax-Saving Investors

ELSS (Equity Linked Savings Scheme) mutual funds provide tax benefits under Section 80C, allowing tax deductions up to ₹1.5 lakh per year.

d) Long-Term Investors

The best equity mutual funds deliver superior returns over 5–10 years. Patience is key to compounding wealth through the power of equity.

e) New-to-Equity Investors

Unsure which stocks to pick? Equity mutual funds are professionally managed, making them a smart way to access stock markets with expert guidance.

Factors to Consider Before Investing

When choosing the best mutual funds in 2025, keep these key points in mind:

Performance Track Record: Look at 3, 5, and 10-year returns.
Fund Objective: Ensure it aligns with your goals and risk tolerance.
Expense Ratio: Lower fees mean better net returns.
Fund Manager’s Expertise: Their skill and experience directly impact fund performance.
Consistency: Choose funds that perform well in various market cycles.

Advantages of Investing in Mutual Funds

Start Small: SIPs make investing affordable for everyone.
Diversification: Spread risk across sectors and companies.
Professional Management: Expert managers handle your portfolio.
Regulatory Oversight: SEBI regulations ensure transparency and security.
Wealth Creation: Historically, equity funds outperform other investment classes in the long term.

Risks Involved in Mutual Fund Investments

While these are among the best mutual funds to invest in 2025, it’s important to understand associated risks:

Market Risk: Impacted by inflation, economic shifts, political instability.
Interest Rate Risk: Affects valuation of equity due to changes in borrowing costs.
Liquidity Risk: Redemption challenges during volatile market phases.

Equity mutual funds remain a compelling choice for long-term investors, especially those starting their SIP journey in 2025. Whether you’re a young professional, a tax-saving enthusiast, or a seasoned investor seeking high-growth opportunities, selecting the best equity mutual fund aligned with your goals can significantly improve your financial future.

Always remember to diversify your portfolio, invest consistently, and stay invested for the long term to unlock the true power of compounding.

Investing in the best mutual fund or starting a SIP can be a game-changer for your financial future—but choosing the right fund aligned with your goals and risk appetite is key.

If you’re unsure where to begin or need personalized investment advice, you can reach out for expert consultation at Beesawa. Whether you’re planning your tax-saving strategy or looking to build long-term wealth, the team at Beesawa can help you make informed decisions with confidence