Investors in India are vigorously focusing on mutual funds. In July alone, equity-oriented funds attracted ₹42,702 crore , an 81% jump from June, marking the 53rd consecutive month of positive inflows.
Mutual funds are core investment tools that utilise funds from various sources and invest them into equity, derivatives, debt, or other asset classes to generate optimal returns. These mutual funds are managed by fund managers who specialise in investment management and thus are the perfect guardians for the fund.
As Indian investors run to mutual funds as their go-to investment mode, it’s time we shed some light on the best mutual funds 2025, and how you can invest in them in 2026.
Top 3 Highest-return mutual funds in 2025
According to Value Research, these three mutual fund categories, as per 3-year returns, are Silver-themed funds, Gold-themed funds, and under the thematic category of equity funds- PSU.
Source: Value Research
Each of these categories has experienced a significant surge in momentum due to various factors. The record high price of gold in India is ₹1,30,800 per 10 grams, reached in October 2025. For silver, the lifetime high is ₹1,89,000 per kilogram, which was also reached in October 2025. Both metals soared due to festive demand, retail buying, and currency movements, with these prices marking historic peaks in the Indian bullion market.
In just a year, silver prices have delivered a 78% return . Gold, too, has soared to reach its all-time high, surging at about 57% in one year. This has pulled investors’ interest, who are opting for mutual funds in this precious metals category to get a slice of this cake.
Thematic equity funds in the PSUs (Public Sector Undertakings) category are also delivering consistently strong returns in India, primarily due to infrastructure, defence, and healthcare initiatives by the government. These funds only invest in companies controlled by the government.
Let’s check out the top 3 funds across all these top-performing mutual fund categories:
1. Silver-themed funds:
| Fund name | |
| Axis Silver Fund of Fund (FoF) | 46.79% |
| Aditya Birla Sun Life Silver ETF FoF | 45.94% |
| Nippon India Silver ETF FoF | 45.66% |
*As of 14th October, 2025
2. Gold-themed funds
| Fund name | |
| Edelweiss Gold & Silver ETF FoF | 40.40% |
| LIC MF Gold ETF FoF | 34.76% |
| Aditya Birla Sun Life Gold Fund | 34.62% |
*As of 14th October, 2025
3. Equity- PSU Thematic funds
| CPSE ETF | 36.95% |
| SBI PSU fund | 33.09% |
| Invesco India PSU Equity fund | 32.68% |
*As of 14th October, 2025
How are these funds trending in India?
The boom in silver prices has led major fund houses to halt fresh lump-sum investments into their silver schemes. Currently, Axis Silver FoF has stopped accepting new investments because of a physical silver supply crunch, which is causing silver ETFs in India to trade at a premium above their actual asset value (NAV). Until the supply situation improves, Axis Silver FoF has therefore temporarily suspended fresh purchases, SIPs, switch-ins, and STPs to protect investors from buying at inflated prices.
While Nippon India Silver ETF FoF and Aditya Birla Sun Life Silver ETF FoF have not yet announced any such plans of suspension, they too may jump on the bandwagon.
Interestingly, the top performer in gold-themed funds, Edelweiss Gold & Silver ETF FoF, is also India’s first gold and silver ETF fund that combines both precious metals in a 50:50 ratio, all in one fund. This fund was launched 3 years ago and has already left its mark.
Edelweiss fund house’ CEO, Radhika Gupta, reiterates that a 50:50 mix of both the precious metals offers investors a safe and consistent balance. Gold acts as a stable haven, supported by global uncertainty and central bank buying, while silver’s industrial and precious metal roles provide growth potential. This simple, balanced strategy has drawn strong investor interest and underscores the enduring value of straightforward investing ideas.
Both LIC MF Gold ETF FoF and Aditya Birla Sun Life Gold Fund are also gaining attention from investors.
Even the top three PSU thematic funds, such as the CPSE ETF, SBI PSU fund, and Invesco India PSU Equity fund, have been performing well. Therefore, they, too are garnering investors’ attention, as evidenced by their strong inflows.
How do these trends blend into your investment plans in 2026?
Looking ahead to 2026, these trends suggest that investors will continue favoring diversified and thematic fund categories that combine stability with growth potential. The rising interest in hybrid gold-silver ETFs reflects a growing preference for balanced investment approaches, while PSU funds capitalise on India’s structural economic reforms.
As experts like Motilal Oswal predict a strong rally for silver reaching ₹2,40,000 per kilogram by 2026-end, the demand for and interest in silver funds are also expected to rise further. Similarly, demand for gold is also poised for continuous growth globally .
PSU funds witnessed a testing phase in 2025 when many PSU funds underperformed due to overvaluation and profit-booking by investors. Despite the recent setbacks, the long-term outlook remains positive, supported by government reforms, increased capital expenditure, and sector-specific growth opportunities. Analysts suggest a cautious approach , emphasising the importance of tactical allocation and patience, as the sector’s cyclicality and valuation concerns might persist into 2026.
Final takeaway
With the lowest inflation since June 2017 (1.54% in September 2025), falling and low interest rates, and a positive macro environment, the future of mutual funds in the silver, gold, and PSU segments is expected to remain growing. Government policies supporting capital expenditure and sectoral reforms bolster PSU funds, while precious metals benefit from global uncertainty and currency movements.
- Best Mutual Funds for 2026 | How to invest in them? - October 17, 2025
