12 Mutual Funds That Doubled Wealth in 2 Years with 75% to 118% Returns

Mutual funds continue to attract investors who seek professional management, diversification, and the potential for long-term wealth creation. While the market has been volatile, certain schemes have managed to deliver exceptional results, rewarding investors far beyond expectations. Over the last two years, some funds generated absolute returns ranging from 75% to an incredible 118%. This performance highlights how thematic, mid-cap, and sector-focused funds can capture growth opportunities when trends align in their favor.

In this article, we will explore the 12 mutual funds that outperformed in the last two years, their objectives, past performance, potential risks, and who should consider investing in them.

Why Some Mutual Funds Outperformed Strongly

The Indian equity market has gone through cycles of corrections and rallies, but sectors such as defence, gold mining, infrastructure, small caps, and PSU companies have emerged as winners. A combination of domestic growth, government spending, and global opportunities created strong tailwinds. Technology and AI-driven global funds also attracted attention, further diversifying investor opportunities.

Funds that capitalized on these themes delivered remarkable results, far exceeding typical equity fund returns. However, investors must remember that such high returns often come with higher risk and volatility.

Top 12 Mutual Funds with 2-Year Returns Between 75% and 118%

Here is the list of funds that delivered the strongest returns in the past two years.

Rank	Mutual Fund Scheme	2-Year Annualised Return (%)	Absolute Return (%)	1 Lakh Became (₹)
1	HDFC Defence Fund	47.6	118%	2,18,000
2	DSP World Gold Fund of Fund	46.3	114%	2,14,000
3	Bandhan Small Cap Fund	34.4	82%	1,82,000
4	Nippon India Taiwan Equity Fund	33.5	80%	1,80,000
5	Invesco India Mid Cap Fund	33.5	80%	1,80,000
6	LIC MF Infrastructure Fund	32.7	78%	1,78,000
7	Invesco India Large & Mid Cap Fund	32.4	77%	1,77,000
8	Invesco India PSU Equity Fund	32.2	76%	1,76,000
9	Motilal Oswal Midcap Fund	32.1	76%	1,76,000
10	Mirae Asset Global X AI & Technology ETF Fund of Fund	32.1	76%	1,76,000
11	SBI PSU Fund	31.6	75%	1,75,000
12	ICICI Prudential PSU Equity Fund	31.6	75%	1,75,000

Deep Dive into Top Performers

HDFC Defence Fund

The defence sector has seen tremendous policy support and government spending in India. HDFC Defence Fund, launched with a focus on defence and allied industries, topped the charts with a 118% absolute return in two years. It is suitable for aggressive investors but carries sector concentration risks.

DSP World Gold Fund of Fund

Global gold mining companies benefited from rising gold prices. DSP World Gold Fund of Fund gave 114% returns, making it a strong hedge against inflation. However, gold prices are volatile and influenced by global currency fluctuations.

Bandhan Small Cap Fund

Small-cap stocks often deliver extraordinary returns during growth cycles. Bandhan Small Cap Fund rewarded investors with 82% gains in two years. While attractive, it comes with high volatility and liquidity risks.

Nippon India Taiwan Equity Fund

Taiwan’s semiconductor and technology industry growth boosted this international equity fund, offering 80% returns. Geopolitical risk remains the biggest challenge, but it provides global diversification.

Invesco India Mid Cap Fund

Mid-cap companies with strong earnings momentum helped Invesco India Mid Cap Fund deliver 80% returns. It is best suited for investors seeking growth higher than large caps but willing to face moderate risk.

LIC MF Infrastructure Fund

India’s push for infrastructure development supported this fund’s 78% return. Infrastructure funds can be cyclical and depend heavily on government projects and execution.

Invesco India Large & Mid Cap Fund

By balancing stability from large caps and growth from mid-caps, this fund generated 77% returns in two years. It provides a blend of growth with slightly lower volatility compared to pure mid-cap funds.

Invesco India PSU Equity Fund

PSU-focused funds benefited from government reforms and better performance in state-owned companies, generating 76% returns. However, they remain dependent on policy shifts and political developments.

Motilal Oswal Midcap Fund

Mid-cap exposure helped this fund deliver 76% returns in two years. It has a history of long-term outperformance but is more volatile than large-cap peers.

Mirae Asset Global X AI & Technology ETF Fund of Fund

This fund gave 76% returns by investing in global companies focused on AI and emerging technology. It is ideal for aggressive investors but comes with higher volatility and tech sector risks.

SBI PSU Fund

SBI’s PSU-focused fund rewarded investors with 75% returns. While PSU performance is improving, these funds remain prone to market cycles and government decisions.

ICICI Prudential PSU Equity Fund

Similar to SBI PSU Fund, this scheme focuses on public sector enterprises and gave 75% returns in two years. It offers sector-specific opportunities but should only be considered by investors comfortable with policy risks.

Key Takeaways for Investors

1. High Returns Come with High Risks – Thematic and sectoral funds can outperform significantly but also face sharper downturns.
2. Diversification is Crucial – Investors should not allocate heavily into a single sector fund.
3. Time Horizon Matters – These funds are suitable for investors with a minimum 5-year outlook to ride through volatility.
4. Global Exposure Can Add Value – International funds like Nippon India Taiwan Equity and Mirae AI Fund provided diversification beyond Indian markets.

Conclusion

The last two years have been exceptional for certain mutual funds, with returns ranging from 75% to 118%. Defence, gold, small caps, mid-caps, infrastructure, and PSU-focused schemes stood out as top performers. However, investors must remember that such high growth is often accompanied by high volatility and sector-specific risks.

Before investing, assess your risk appetite, investment horizon, and financial goals. For long-term wealth creation, these funds can play a role, but they should complement a well-diversified portfolio rather than dominate it.