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Long-term returns remain strong across leading funds like Quant Small Cap and Nippon India Small Cap despite short-term volatility.
Mid-cap performers such as Motilal Oswal Midcap and Edelweiss Mid Cap continue showing consistent multi-year growth.
Multi-cap options like ICICI Prudential India Opportunities Fund offer balanced exposure with resilient 3-year and 5-year performance.
Mutual fund performance has inclined strongly towards schemes that balance volatility with consistent long-term growth in 2025. Small- and mid-cap funds, though their short-term returns have become volatile, continue to top the performance charts over 3- and 5-year horizons. December 2025 is a month when long-term numbers matter more than short-term fluctuations. The following mutual funds stand out for their resilience, disciplined asset management, and ability to deliver high returns despite market corrections.
Also Read: Best Performing Mutual Fund SIP Portfolios to Invest in December 2025
Quant Small Cap Fund has remained one of the strongest performers in the small-cap category over the long term. Its NAV is at Rs. 275.28, backed by an AUM of Rs. 30,504.40 crore. While the 1-month return is –2.94% and the 1-year return is –7.05%, the longer horizon can be quite different. It has returned 21.58% over 3 years and 31.75% over 5 years.
These numbers capture the fund's high-conviction, dynamic allocation style, which tends to lead rallies in bull markets but corrects aggressively. Short-term gyrations usually mark the small-cap universe, but its long-term trajectory remains one of the strongest in its category.
Motilal Oswal’s mid-cap fund continues to attract investor interest with its strong long-term performance. The NAV is Rs. 117.83, with an AUM of Rs. 37,500.90 crore. Even though the fund posted –0.77% in 1-month returns and –7.35% in 1-year returns, its 3-year return of 25.94% and 5-year return of 30.75% highlight its strength.
The research-driven investment approach at Motilal Oswal helps the scheme identify mid-cap companies with sustainable earnings growth. In fact, this focused approach has helped the fund remain resilient even during bouts of market volatility in 2025, making it a strong contender for long-term portfolios.
Nippon India Small Cap Fund remains one of the largest and most popular small-cap funds in India, with an NAV of Rs. 185.99 and an AUM of Rs. 68,969.10 crore. Typical small-cap volatility is reflected in the short-term numbers, including the one-month return at –3.51% and the one-year return at –7.32%.
The fund has consistently delivered steady returns over the long term, with 20.88% over 3 years and 29.24% over 5 years. With its broad sector diversification and robust stock-picking abilities, this fund is well positioned to capitalize on growth opportunities in emerging companies.
This scheme replicates the performance of its parent scheme: with the same NAV of Rs. 185.99 and AUM of Rs. 68,969.10 crore. Even the return pattern is the same: –3.51% for 1 month, –1.22% for 3 months, –7.32% for 1 year, 20.88% for 3 years, and 29.24% for 5 years. Such consistency between plans gives assurance of predictable outcomes to the long-term investor.
This ICICI fund is a distinctive multi-cap strategy with superior short-term and long-term performance: The fund’s NAV stands at Rs. 41.21, with an AUM of Rs. 32,669.00 crore. Unlike many funds in 2025, it has performed positively in the short term, returning 1.98% in 1 month and 7.35% in 3 months.
The 1-year return of 9.95% reflects its better volatility management than most of its peers. Long-term returns are still strong, with 23.29% over 3 years and 29.19% over 5 years. The fund's flexible investment style enables it to switch between value and growth opportunities based on market conditions, giving it a specific edge in uncertain environments.
Bandhan Small Cap Fund remains among the top performers in the small-cap category. The fund has a NAV of Rs. 50.94 and AUM of Rs. 17,380.30 crore. The fund is under short-term pressure: for instance, –3.29% for 1-month return and –2.22% for 1-year return.
However, it has recorded 30.36% over 3 years and 29.07% over 5 years, indicating its strong long-term performance. A well-disciplined approach toward selecting early-stage growth companies enables the scheme to generate consistent outperformance across market cycles.
Edelweiss Mid Cap Fund remains one of the steadier performers in the mid-cap category. The current NAV is Rs. 122.05, with an AUM of Rs. 12,646.90 crore. It has returned 0.47% in 1-month returns and 3.27% in 1-year returns, fairly well-balanced in a turbulent year. The fund has also delivered 25.69% over 3 years and 27.53% over 5 years. Its strategy of investing in fundamentally sound mid-cap companies with clear growth visibility helps sustain stability and deliver competitive long-term returns.
HDFC Focused Fund has been one of the steadiest performers, with its NAV at Rs. 273.00 and AUM at Rs. 25,140.40 crore. The fund returned 0.84% over 1 month, 3.78% over 3 months, and 9.46% over 1 year. It generated 21.75% over 3 years and 27.34% over 5 years in the long term. As a focused fund, it holds a limited number of high-conviction stocks, based on deeper research and stronger portfolio control.
Nippon’s multi-cap fund has a NAV of Rs. 331.64 and AUM of Rs. 49,313.70 crore. It reported –1.00% over 1 month but delivered 0.67% in 3 months and 1.58% over 1 year. Long-term returns have remained encouraging at 21.76% at 3 years and 27.14% at 5 years. Its diversified exposure to large-, mid-, and small-cap companies helps strike a delicate balance between risk and opportunity across market segments.
Also Read: Best Mutual Funds to Invest in December 2025
Long-term consistency plays a more vital role than short-term volatility, from the above observations. And that is why small-cap and mid-cap funds continue to outshine on a 3-year and 5-year trajectory, even as temporary corrections occur.
Multi-cap and focused funds also demonstrate strong resilience. For investors who want proven long-term performers, these schemes rank among the most potent options for sustainable wealth creation in the current market environment.
1. Which mutual funds are performing best in December 2025?
Top performers include Quant Small Cap, Motilal Oswal Midcap, ICICI Prudential India Opportunities Fund, Nippon India Small Cap, and Bandhan Small Cap.
2. Why are small-cap funds showing strong long-term returns?
Small-cap funds benefit from early-stage growth companies that expand rapidly, leading to higher 3-year and 5-year returns despite short-term volatility.
3. Are mid-cap mutual funds safer than small-cap funds?
Mid-cap funds generally offer a balance of growth and stability, making them less volatile than small-cap funds while still delivering strong long-term performance.
4. Can multi-cap funds reduce market risk?
Multi-cap funds spread investments across large, mid, and small-cap stocks, helping reduce risk while capturing opportunities across market cycles.
5. Is December 2025 a good time to invest in mutual funds?
Market volatility exists, but strong long-term data across several top-performing funds indicate continued potential for sustainable wealth creation.
