10 Mutual Funds That Delivered 12% To 22% Returns In Just 6 Months

Market volatility and global uncertainty failed to slow the momentum of several sectoral and thematic mutual funds over the last six months. Investors who remained invested in focused themes such as power, defence, healthcare, natural resources and capital markets witnessed notable gains during this period.

Data available till 22 May, 2026 shows that several mutual funds delivered returns ranging between 12% and 22% in just six months. However, financial experts continue to highlight that while thematic and sector-focused funds can generate strong gains during favourable market cycles, they also carry higher concentration risks and can face sharp corrections when sector momentum weakens.

Power Sector Funds Emerge As Top Performers

Among the strongest performers during the period was the Groww BSE Power ETF Fund of Fund Direct Plan, which generated around 22.3% returns in six months. The fund focuses on companies associated with power generation, transmission and infrastructure-related businesses.

The power sector has witnessed renewed investor interest due to rising electricity demand, infrastructure expansion and increased government spending on energy development projects. Analysts believe the long-term growth outlook for the sector remains positive, although sharp volatility cannot be ruled out in sector-specific investments.

DSP Natural Resources and New Energy Fund also remained among the notable performers. The scheme, which invests across energy, mining, utilities and new energy-related companies, delivered approximately 18% returns in the six-month period. The fund has also maintained relatively strong long-term performance across one-year, three-year and five-year periods.

Experts note that commodity and energy-linked sectors can benefit significantly during economic expansion cycles, but they are also highly sensitive to global price fluctuations and geopolitical developments.

Capital Market-Themed Funds Continue To Gain Momentum

Funds linked to India’s growing capital market ecosystem also attracted considerable investor attention. The Motilal Oswal Nifty Capital Market Index Fund Direct Plan delivered around 17.7% returns in six months, while the Tata Nifty Capital Markets Index Fund posted gains close to 17.5%.

These schemes invest in companies associated with stock exchanges, brokerage firms, asset management businesses and financial market infrastructure. Increased retail participation in equities, rising demat account openings and strong trading activity have supported growth in this segment.

Market experts believe India’s financialisation trend continues to strengthen, though they advise investors against allocating excessive exposure to a single theme due to concentration-related risks.

Defence Funds Remain In Focus

Defence-oriented mutual funds also continued their upward trajectory amid strong government focus on domestic manufacturing and exports. HDFC Defence Fund generated around 13.9% returns in the last six months, while Groww Nifty India Defence ETF Fund of Fund delivered nearly 12.4%.

Investor sentiment towards defence-linked businesses has improved significantly over the past few years due to policy support, increased budget allocations and the push towards self-reliance in manufacturing.

However, analysts warn that valuations in several defence-related companies have become expensive after sharp rallies. Since these funds are heavily concentrated in one sector, investors should remain cautious about potential corrections during weaker market phases.

Healthcare Funds Offer Stability During Volatile Markets

Healthcare and pharmaceutical-focused funds also remained resilient amid uncertain market conditions. HDFC Pharma and Healthcare Fund generated around 13.1% returns during the six-month period, while Mirae Asset Healthcare Fund and Kotak Healthcare Fund delivered gains of nearly 13%.

Healthcare-focused schemes invest in pharmaceutical companies, hospitals, diagnostics firms and healthcare service providers. Investors often consider these funds relatively defensive during periods of economic uncertainty.

The Mirae Asset Healthcare Fund additionally demonstrated strong longer-term performance over three years, reflecting sustained investor interest in the healthcare segment.

Industry experts believe healthcare themes can provide diversification benefits within an equity portfolio, although regulatory changes, export-related risks and global pricing pressure continue to remain key challenges for pharmaceutical businesses.

MNC Fund Also Posts Healthy Gains

Kotak MNC Fund, which invests in multinational companies operating in India, delivered approximately 13% returns over the six-month period. Such funds typically focus on financially strong and established businesses across sectors.

Many investors prefer multinational-focused schemes due to their relatively stable business models, governance standards and long-term growth potential. However, these funds can also face valuation-related risks during periods of market optimism.

Investors Advised Against Chasing Short-Term Returns

While recent returns from thematic and sectoral mutual funds appear attractive, financial planners continue to caution investors against making investment decisions purely based on short-term performance.

Sectoral funds often perform strongly during favourable economic or policy cycles but may underperform sharply once momentum fades. Concentrated exposure to a single sector increases overall portfolio volatility compared to diversified equity funds.

Experts generally recommend evaluating investment decisions based on financial goals, risk appetite, investment horizon and existing portfolio allocation rather than recent performance alone. Many investors use thematic and sectoral funds as limited tactical allocations while relying on diversified equity funds for long-term core holdings.

Systematic Investment Plans, commonly known as SIPs, are also considered a preferred strategy by many investors to manage volatility and avoid timing-related risks in equity investing.

Despite the recent rally across several themes, market specialists maintain that disciplined investing and portfolio diversification remain essential for long-term wealth creation.

Disclaimer: This article is meant for informational and educational purposes only and should not be considered investment advice. Mutual fund investments are subject to market risks. Investors should carefully assess their financial goals and consult a qualified financial adviser before making investment decisions.