Top-performing mutual funds in December 2025 combine strong 3-year CAGR with stable AUM.
Flexi Cap and Mid-cap Funds continue to lead growth-driven investment choices.
A mix of equity, hybrid, and liquid funds helps balance returns and reduce risk.
Selecting the right mutual funds can help create a strong and balanced investment portfolio. Market conditions in 2025 favour funds with consistent management strategies and stable asset sizes.
This article lists some of the best mutual funds from different categories, based on their Assets Under Management (AUM), three-year CAGR performance, expense ratios, and reliability. These funds include equity, hybrid, liquid, and multi-asset strategies suitable for different investment goals.
Flexi Cap funds allow fund managers to invest freely in large-cap, mid-cap, and small-cap stocks. This flexibility helps the fund perform well through changing market cycles.
Parag Parikh Flexi Cap Fund has an AUM of Rs. 1,25,799.63 crore, a strong CAGR of 21.45% over 3 years, and an expense ratio of 0.63%. Investors who want steady growth with controlled risk prefer this fund as it provides a diversified portfolio and long-term focus.
HDFC Flexi Cap Fund is another strong performer with an AUM of Rs. 91,041.00 crore, 21.38% CAGR in 3 years, and an expense ratio of 0.68%. People who invest in this fund have a huge advantage as it provides stable management and broad market exposure.
Kotak Flexicap Fund also deserves attention. With assets of Rs. 56,039.86 crore, a three-year CAGR of 16.76%, and an expense ratio of 0.59%, it provides a balanced approach to long-term wealth creation.
Mid-cap funds displayed an impressive three-year performance supported by strong earnings in mid-sized Indian companies.
HDFC Mid Cap Fund leads mid-cap funds with an AUM of Rs. 89,383.23 crore and a three-year CAGR of 25.69%, supported by an expense ratio of 0.71%. Its focus on quality mid-cap companies has provided high returns.
Kotak Midcap Fund is another high-performing option as it manages assets worth Rs. 60,385.03 crore with a 21.53% CAGR over three years and an expense ratio of 0.37%, one of the lowest in this category.
Also Read - Best Flexi-Cap Mutual Funds to Invest in 2025
Large-cap funds are a stable choice because they majorly invest in well-established companies and are less volatile during market uncertainty.
ICICI Prudential Large Cap Fund leads the list with an AUM of Rs. 75,863.08 crore, a three-year CAGR of 17.95%, and an expense ratio of 0.85%. It focuses on strong blue-chip companies, providing long-term stability.
Another reliable option is SBI Large Cap Fund, which manages Rs. 54,687.99 crore in assets, delivers a 14.33% CAGR over 3 years, and maintains an expense ratio of 0.79%.
Nippon India Large Cap Fund also performs well, holding an AUM of Rs. 48,870.60 crore, a solid 19.28% CAGR, and a cost-efficient 0.67% expense ratio.
Small-cap and multi-cap funds remain suitable for long-term wealth creation, especially for investors who can handle higher volatility.
Nippon India Small Cap Fund is a great choice for December 2025. It has an AUM of Rs. 68,969.15 crore, a 21.89% three-year CAGR, and an expense ratio of 0.63%. The fund’s broad exposure across small companies helps it capitalize on growth opportunities.
Nippon India Multi Cap Fund is a great choice in the multi-cap category as it manages Rs. 49,313.70 crore in assets, and has a 21.94% CAGR and a 0.71% expense ratio. The strategy of investing across large, mid, and small-cap segments adds stability and growth potential.
ICICI Pru Multi-Asset Fund is another strong performer, holding Rs. 71,900.48 crore in AUM, offering a three-year CAGR of 19.82%, and charging a 0.69% expense ratio. Its mix of equity, debt, and gold provides balanced returns regardless of market movement.
Also Read - Best Performing Low-Risk Mutual Funds for 2025
Hybrid funds combine equity and debt to create a smoother investment experience, making them suitable for moderate-risk profiles.
HDFC Balanced Advantage Fund leads the list with an AUM of Rs. 1,06,493.55 crore, a three-year CAGR of 18.19%, and an expense ratio of 0.73%. Its dynamic asset allocation strategy adjusts equity exposure based on market valuations.
SBI Equity Hybrid Fund offers another dependable option. With Rs. 81,951.86 crore in assets and a 14.45% CAGR, this fund maintains an expense ratio of 0.72%. Its mix of equity and debt provides consistent long-term performance.
ICICI Pru Balanced Advantage Fund also performs well, managing Rs. 68,449.94 crore in assets with a 14.09% three-year CAGR and an expense ratio of 0.87%.
Liquid and arbitrage funds have a crucial role in short-term financial plans and capital protection.
SBI Liquid Fund is among the largest in India, with an AUM of Rs. 71,091.78 crore, a three-year CAGR of 7.02%, and a low expense ratio of 0.19%. It is suitable for short-term parking of surplus money.
HDFC Liquid Fund follows closely, managing Rs. 61,646.54 crore, delivering a 7.04% CAGR, and maintaining a 0.20% expense ratio.
ICICI Pru Liquid Fund has an AUM of Rs. 50,120.55 crore, a 7.06% CAGR, and charges 0.20% in expenses.
Investors who want low-risk equity-linked returns can choose Kotak Arbitrage Fund. It provides stability with an AUM of Rs. 72,279.21 crore, a 7.91% three-year CAGR, and a low expense ratio of 0.44%.
Investors have many options such as flexi cap, mid cap, large cap, hybrid, multi-asset, and liquid funds to increase their wealth. Whether they want balanced growth or short-term capital safety the funds mentioned above, with their AUM, CAGR, and expense ratios provide a reliable start for smart financial planning.
1. Which mutual funds are performing best in December 2025?
The leading performers include Parag Parikh Flexi Cap Fund, HDFC Mid Cap Fund, Nippon India Small Cap Fund, and ICICI Pru Multi-Asset Fund based on strong 3-year CAGR and stable AUM.
2. Are Flexi Cap Funds good for long-term investing?
Yes, Flexi Cap Funds are suitable for long-term growth because they invest across large, mid, and small-cap stocks, offering flexibility in changing markets.
3. Why are Mid-cap Funds showing strong returns?
Mid-cap companies have been growing rapidly, and this has helped Mid-cap Funds like HDFC Mid Cap Fund and Kotak Midcap Fund deliver a high 3-year CAGR.
4. Which funds are suitable for low-risk investors in 2025?
Liquid funds such as SBI Liquid Fund, HDFC Liquid Fund, and arbitrage options like Kotak Arbitrage Fund offer low-risk and stable short-term returns.
5. What factors should be considered before investing in mutual funds?
Important factors include the fund’s 3-year CAGR, AUM size, expense ratio, category performance, and alignment with personal financial goals.