From ₹1 Lakh to ₹5 Lakhs: 6 Mutual Funds That Sparkled in 5 Years

Many investors dream of turning a small sum into a much larger one. This dream has come true for some in the world of mutual funds. A recent analysis shows that certain mutual funds in India have helped investors multiply their money significantly. A lumpsum investment of ₹1 lakh in these funds five years ago would now be worth ₹5 lakhs or more. This means they delivered an amazing return of 400% or higher!

This impressive growth highlights the power of long-term investing. It also shows the potential of equity mutual funds, especially those focused on small and mid-cap companies. These funds often invest in smaller companies with high growth potential. While they carry higher risk, they can also offer bigger rewards.

Let's look at some of these star performers. These funds have consistently delivered strong returns over the past five years (roughly from mid-2020 to mid-2025). Please remember, past performance does not guarantee future returns. Investing in mutual funds always carries market risks.

The Power of Compounding: How ₹1 Lakh Grew to ₹5 Lakhs

To turn ₹1 lakh into ₹5 lakhs in five years, a mutual fund needs to deliver a Compound Annual Growth Rate (CAGR) of around 36.96% per year. This means your money grows not just on your initial investment, but also on the returns earned each year. This is the magic of compounding.

Several funds have managed to achieve or even exceed this rate. These funds are mainly from the small-cap and sectoral/thematic categories. These categories have seen strong performance in the Indian market over the last few years.

Top Performing Mutual Funds

Here are 6 mutual funds that have shown remarkable growth, potentially turning ₹1 lakh into ₹5 lakhs or more in a 5-year period (data reflects approximate returns as of mid-2025 based on available information):

1. Quant Small Cap Fund Direct Plan - Growth: This fund has been a consistent outperformer in the small-cap category. It aims to achieve long-term capital growth by investing mainly in small-cap companies. Its aggressive investment style has paid off handsomely. It has delivered impressive annualized returns over the past five years.
2. Quant Infrastructure Fund Direct - Growth: This sectoral fund focuses on the infrastructure sector. India's growth story heavily relies on infrastructure development. This fund has benefited from investments in companies related to this booming sector.
3. Nippon India Small Cap Fund Direct - Growth: One of the largest small-cap funds, this fund has a strong track record. It seeks to identify small companies with high growth potential and good valuations. Its diversified portfolio across many small-cap stocks has contributed to its success.
4. ICICI Prudential Infrastructure Fund Direct - Growth: Another top performer in the infrastructure theme, this fund has captured the growth in India's infrastructure sector. It has shown robust returns over the five-year period.
5. Bandhan Small Cap Fund Direct - Growth: This small-cap fund has also delivered excellent returns. It focuses on identifying emerging businesses in the small-cap space, which often have higher growth opportunities.
6. Motilal Oswal Midcap Fund Direct - Growth: While small-cap funds have dominated, some mid-cap funds have also performed exceptionally well. This fund invests in mid-sized companies, which balance growth potential with relative stability compared to small-caps.
7. Quant ELSS Tax Saver Fund Direct Growth: An ELSS (Equity Linked Savings Scheme) fund, this also offers tax benefits under Section 80C. Its strong performance shows that you can save taxes and grow your wealth at the same time.

Comparative Table of Top Mutual Funds (Approximate 5-Year Annualized Returns)