The New Wave of NRI Wealth Returning Home
Every few years, global wealth starts to flow in a new direction and in 2025, that direction points unmistakably toward India.
As an NRI, you’ve seen the world’s markets the bustling streets of New York, the efficient corridors of London, and the ever-changing dynamics of Dubai and Singapore. Yet, something about India’s growth story feels different this time.
India is not just emerging anymore it’s evolving. And for NRIs, the Indian mutual fund space offers a once-in-a-decade opportunity to participate in the nation’s wealth creation engine. But here’s the question Which mutual funds are truly worth your money in 2025?
In this detailed guide, we’ll explore Top Mutual Fund for NRI that have consistently delivered strong returns, proven resilience across market cycles, and offer a perfect blend of growth, stability, and opportunity for NRIs investing back home.
Why NRIs Are Turning to Indian Mutual Funds in 2025
India’s economy is expected to grow at a robust pace with GDP growth projections above 7%, stable inflation, and an increasingly tech-driven corporate landscape. At the same time, the mutual fund industry in India has crossed ₹60 lakh crore in AUM, making it one of the fastest-growing investment ecosystems globally.
For NRIs, Indian mutual funds provide:
- High-growth potential compared to developed markets
- Diversification benefits through sectoral and multi-cap exposure
- Professional fund management with strict SEBI oversight
- Ease of investment through NRE/NRO accounts and online platforms
Whether you’re living in the US, UAE, UK, or Singapore, these funds make it easier than ever to participate in India’s booming markets.
Read- How Can NRIs Invest in Indian Mutual Funds? Step-by-Step Guide
1. Motilal Oswal Midcap Fund (Direct – Growth)
Category: Equity – Mid Cap
Risk Level: Moderately High
AUM (as of 2025): ₹34,749 crore
Expense Ratio: 0.69% (Direct Plan)
NAV (Oct 2025): ₹119.48
Returns:
- 1 Year: –3.4%
- 3 Year CAGR: 28.5%
- 5 Year CAGR: 35.3%
What Makes It Stand Out
The Motilal Oswal Midcap Fund focuses on high-quality mid-sized companies that are on the cusp of becoming tomorrow’s large caps. Think of it as the bridge between stability and explosive growth.
Its strategy revolves around a concentrated portfolio of 25–30 carefully chosen midcap stocks — firms with proven earnings, strong leadership, and scalable business models.
Despite short-term corrections (like the –3.4% 1-year return), its long-term performance has been stellar, with a five-year CAGR exceeding 35%, outperforming many large-cap peers.
Why NRIs Should Consider It
- High growth potential: Midcaps tend to outperform during bullish cycles.
- Diversification: A great addition to portfolios dominated by large-cap or global investments.
- Proven management: Motilal Oswal AMC has decades of equity market expertise.
Ideal for: NRIs with a moderate-to-high risk appetite and a long-term (5+ years) investment horizon.
2. ICICI Prudential Large & Mid Cap Fund (Direct – Growth)
Category: Large & Mid Cap Equity
Risk Level: Moderately High
AUM (2025): ₹24,424 crore
Expense Ratio: 1.64% (Regular) / lower in Direct
Returns:
- 1 Year: 4.19%
- 3 Year CAGR: 22.15%
- 5 Year CAGR: 27.39%
Why It Deserves a Place in Every NRI Portfolio
This fund is the perfect balance between stability and growth. It blends large-cap blue-chip companies with fast-growing midcaps — giving investors the best of both worlds.
In a year when small and midcaps have seen volatility, ICICI Prudential’s balanced strategy has helped it deliver consistent returns with lower downside risk.
The fund’s manager actively rotates allocations between large and mid caps based on market valuations — a flexible approach that makes it well-suited for unpredictable global and domestic conditions.
Why NRIs Should Consider It
- Balanced exposure: Combines steady compounders with high-growth midcaps.
- Less volatile: Offers smoother returns compared to pure midcap or smallcap funds.
- Reputed AMC: ICICI Prudential has a stellar track record in risk management and investor protection.
Ideal for: NRIs seeking core portfolio stability with a dash of growth — especially those investing through SIPs.
3. Parag Parikh Flexi Cap Fund (Direct – Growth)
Category: Flexi Cap (Multi-Cap + Global Exposure)
Risk Level: Moderate
AUM (2025): ₹1,36,757 crore
Expense Ratio: ~0.9% (Direct)
NAV (Oct 2025): ₹93.47
Returns:
- 1 Year: 5.36%
- 3 Year CAGR: 21.5%
- 5 Year CAGR: 21.3%
Why It’s a Global-Indian Hybrid That Works
Parag Parikh Flexi Cap Fund is not just another domestic equity fund — it’s a globally diversified portfolio blending Indian blue chips with select international stocks.
Its philosophy centers on long-term value investing, focusing on quality businesses available at reasonable valuations. The fund holds Indian giants like HDFC Bank and Infosys alongside global names, providing a unique hedge against rupee depreciation.
This makes it one of the few mutual funds that align perfectly with NRI needs — combining familiarity with global diversification.
Why NRIs Should Consider It
- Built-in global diversification: Reduces home-country bias.
- Strong downside protection: Flexible allocation minimizes losses in market corrections.
- Steady long-term growth: Proven 5-year CAGR above 21%.
Ideal for: NRIs seeking balanced, long-term wealth creation through diversified equity exposure.
4. Bandhan Small Cap Fund (Direct – Growth)
Category: Small Cap Equity
Risk Level: High
AUM (2025): ₹15,738 crore
Expense Ratio: 0.41%
NAV (2025): ₹52.12
Returns:
- 1 Year: –0.63%
- 3 Year CAGR: 31.83%
- 5 Year CAGR: 32.37%
- Since Inception: 33.68%
The Hidden Gem in the Small-Cap Universe
Bandhan Small Cap Fund is a high-conviction small-cap performer that has delivered spectacular long-term growth despite short-term volatility.
In just a few years, it’s become one of India’s most admired small-cap funds. Its 3-year CAGR of over 31% and 5-year CAGR of 32% stand as proof of its consistent alpha generation.
It focuses on under-researched small and emerging companies — the ones that could become tomorrow’s midcaps or even blue chips.
Why NRIs Should Consider It
- Massive growth potential: Ideal for those willing to ride out short-term volatility.
- Expert stock selection: Strong track record of finding multi-bagger opportunities early.
- Powerful compounding: Over time, small caps can outperform every other category.
Ideal for: NRIs with high risk tolerance and a 7–10 year horizon looking for exponential capital appreciation.
5. Nippon India Large Cap Fund (Direct – Growth)
Category: Large Cap Equity
Risk Level: Moderate
AUM (2025): ₹46,463 crore
Expense Ratio: 0.69%
NAV (Direct, Oct 2025): ₹101.30
Returns:
- 1 Year: –0.15%
- 3 Year CAGR: 20.9%
- 5 Year CAGR: 26.1%
Why This Blue-Chip Fund Deserves Respect
The Nippon India Large Cap Fund is a steady compounder that focuses on India’s most established and financially sound companies.It’s designed for investors who prioritize consistency over thrills — those who want exposure to the stock market without extreme volatility.
The fund invests primarily in companies within the Nifty 50 and BSE 100, balancing quality with growth.While 1-year returns have been flat due to market fluctuations, the long-term CAGR (3Y and 5Y) demonstrates its reliability and resilience through market cycles.
Why NRIs Should Consider It
- Foundation fund: Ideal as the core of an NRI’s Indian portfolio.
- Low volatility: Offers protection during market downturns.
- Proven consistency: Outperformed most peers over 5 years.
Ideal for: NRIs who prefer steady, risk-adjusted returns and long-term capital stability.
Quick Comparison: Top Mutual Fund for NRI (2025)
| Fund Name | Category | 1-Year | 3-Year CAGR | 5-Year CAGR | AUM (₹ Cr) | Risk Level |
|---|---|---|---|---|---|---|
| Motilal Oswal Midcap Fund | Mid Cap | –3.4% | 28.5% | 35.3% | 34,749 | High |
| ICICI Prudential Large & Mid Cap Fund | Large & Mid | 4.19% | 22.15% | 27.39% | 24,424 | Moderate |
| Parag Parikh Flexi Cap Fund | Flexi Cap | 5.36% | 21.5% | 21.3% | 1,36,757 | Moderate |
| Bandhan Small Cap Fund | Small Cap | –0.63% | 31.83% | 32.37% | 15,738 | High |
| Nippon India Large Cap Fund | Large Cap | –0.15% | 20.9% | 26.1% | 46,463 | Moderate |
How NRIs Can Invest in Indian Mutual Funds
If you’re an NRI ready to invest, here’s the step-by-step process:
- Open an NRE or NRO account with a registered Indian bank.
- Complete KYC using your passport, visa, PAN, and overseas address proof.
- Select a mutual fund platform either directly with AMC or through trusted fintech platforms.
- Choose between Direct and Regular Plans (Direct offers higher returns due to lower costs).
- Opt for SIP or Lump Sum investment based on your goals and currency exposure.
- Stay compliant with FEMA & FATCA rules depending on your country of residence.
Expert Take: The NRI Advantage in 2025
NRIs hold a unique edge you can diversify globally while benefiting from India’s unmatched growth potential.
As developed markets stagnate, India offers real growth in sectors like banking, manufacturing, tech, and energy. With proper fund selection and consistent investing, NRIs can turn their Indian mutual fund portfolio into a powerful long-term wealth engine.
Final Thoughts: Invest in India’s Growth Story
The story of India in 2025 is one of resilience, innovation, and unstoppable growth. For NRIs, this is more than just an investment — it’s a homecoming of wealth.
The five funds we explored — Motilal Oswal Midcap, ICICI Prudential Large & Mid Cap, Parag Parikh Flexi Cap, Bandhan Small Cap, and Nippon India Large Cap each offer a unique path to wealth creation, suited for different risk profiles.
Whether you prefer the stability of large caps or the thrill of small caps, the key is consistency and patience.
So as you plan your investments this year, remember:
“Best Investment Options for NRI in India 2025 Where to Invest Smartly This Year”
Key Takeaways for NRIs
- Start with diversified exposure across large, mid, and small caps.
- Prefer direct plans for higher long-term returns.
- Don’t chase short-term gains — aim for 3–5+ years.
- Monitor currency and tax implications before investing.
- Stay consistent — India rewards patient investors.
FAQ
Q1: What are the best mutual funds for NRIs to invest in India in 2025?
The top-performing mutual funds for NRIs to consider in 2025 are Motilal Oswal Midcap Fund, ICICI Prudential Large & Mid Cap Fund, Parag Parikh Flexi Cap Fund, Bandhan Small Cap Fund, and Nippon India Large Cap Fund. These funds have shown strong long-term performance, consistent CAGR returns, and align well with different NRI investment goals and risk appetites.
Q2: Can NRIs invest directly in Indian mutual funds from abroad?
Yes, NRIs can invest directly in Indian mutual funds using their NRE or NRO accounts. They must complete KYC verification using documents such as passport, PAN, and overseas address proof. Many AMCs and fintech platforms allow NRIs to invest online. However, some AMCs have restrictions for U.S. and Canadian residents due to FATCA regulations.
Q3: Are mutual fund returns taxable for NRIs in India?
Yes, NRIs are subject to capital gains tax on mutual fund returns in India. Short-term and long-term gains are taxed differently depending on the type of fund (equity or debt) and holding period. TDS (Tax Deducted at Source) is automatically applied on NRI mutual fund redemptions. NRIs can also claim tax benefits under the Double Taxation Avoidance Agreement (DTAA) if applicable.
Q4: Which type of mutual fund is best for NRIs large cap, mid cap, or small cap?
The ideal mutual fund type depends on your risk appetite and investment horizon. Large-cap funds like Nippon India Large Cap Fund offer stability and steady growth, while mid-cap funds such as Motilal Oswal Midcap Fund provide higher growth with moderate risk. Small-cap funds like Bandhan Small Cap Fund deliver high returns but come with higher volatility. NRIs can balance all three through diversified portfolios.
Q5: How can NRIs repatriate mutual fund profits from India?
A5: NRIs can repatriate mutual fund redemption proceeds to their overseas bank accounts through NRE accounts. Funds invested via NRE accounts are fully repatriable, while investments through NRO accounts are repatriable up to $1 million per financial year after payment of applicable taxes. It’s important to follow FEMA and RBI guidelines during the repatriation process.
Disclaimer
This article is for educational and informational purposes only. The information provided herein is not investment advice or a recommendation to buy or sell any mutual fund or security. Past performance is not indicative of future results. Investors, including NRIs, should consult their financial advisor or conduct independent research before making any investment decisions.
