Mutual funds are once again becoming more popular. Look at these five wagers for 2025

With the stock market showing positive signs and investor sentiment improving, mutual funds are making a comeback. Many investors are looking at them as a vehicle to grow their wealth steadily. In a recent conversation with India Today, Swapnil Aggarwal, Director at VSRK Capital, outlined five mutual fund categories that are worth considering in the current market conditions.

1. Small-Cap Fund
   Aggarwal recommends investing in small-cap funds, which focus on emerging, fast-growing companies. These companies often show strong growth potential but come with a higher risk factor. As an investor, if you're aggressive, can handle some risk, and are ready to stay invested for several years, this could be a lucrative option. As of May 2, 2025, this fund has delivered an annualised 3-year return of 22.21% and a 1-year return of 0.84%.

2. HDFC Midcap Opportunities Fund
   For those looking for a middle ground, the HDFC Midcap Opportunities Fund focuses on mid-sized companies that are well-established but still in their growth phase. This makes it suitable for long-term investors seeking steady growth without too much volatility. As of May 2, 2025, the fund posted a 25.23% 3-year annualised return and a 9.39% 1-year return.

3. ICICI Prudential Equity & Debt Fund
   This hybrid fund combines equities (growth potential) with debt instruments (stability), making it a great option for conservative investors who prefer less market fluctuation. It provides a steadier, less risky investment journey. As of May 2, 2025, the fund's 3-year annualised return stood at 19.62%, while its 1-year return was 11.02%.

4. Large-Cap and Mid-Cap Fund
   This category focuses on a blend of strong, large-cap companies and promising mid-cap stocks. It offers diversification, which helps lower the overall risk while providing growth opportunities. These funds are a good choice for those looking to strike a balance between stability and growth. As of May 2, 2025, the fund achieved a 24.38% 3-year annualised return and a 10.94% 1-year return.

5. Axis Bluechip Fund
   Focused solely on top-performing, large-cap companies, the Axis Bluechip Fund is ideal for beginners or more conservative investors who want to grow their money slowly but steadily. The fund offers a stable, lower-risk option while still providing some growth potential. As of May 2, 2025, the fund delivered a 12.05% 3-year annualised return and a 7.95% return for the past year.