Five-star mutual funds: what the ratings show

The number

On 1 October 2026, 185 funds held a 5-star rating on WealthTicker, out of 1,629 rated funds. That is 11.4%.

These ratings are our own, computed from each fund's NAV history and expense ratio, and published in full on the methodology page. They are not a SEBI or rating-agency rating. The count covers live Direct Growth plans, excluding ETFs and segregated portfolios: 1,805 funds, of which 1,629 had enough history and enough peers to be rated.

How a star is earned

A fund is compared only with its own peers: the same sub-category, plan and option. It gets four percentiles, weighted:

That composite is ranked again within the peer group, and the rank decides the stars: the top 10% get five, the next 22.5% four, the middle 35% three, the next 22.5% two and the bottom 10% one.

A fund under three years old is rated on its 1-year return instead. 395 of the 1,629 are rated that way, including 69 of the 185 five-star funds.

The distribution

The shares sit close to the intended split. They are not exact because each peer group is cut separately, and a group of 15 funds cannot be divided into precise tenths.

What a 5-star fund looks like

For the 116 five-star funds rated on three years, the median percentiles against their own peers were:

• Performance: 84.9
• Downside: 76.1
• Cost: 75.0
• Risk: 65.4

So the typical 5-star fund is well ahead on returns, but not at the very top, and clearly better than its peers at losing less. It is not always the calmest: 38 of the 116 were more volatile than their peer median, and 29 more expensive.

The 1-star funds are the mirror image, with median percentiles of 14.3 on performance, 17.4 on downside, 21.2 on cost and 29.6 on risk.

One category up close: flexi cap

Flexi cap is a large peer group, 36 funds rated on three years. NAVs are to 30 September 2026 and expense ratios from AMFI's disclosure of the same date.

The 4-star flexi caps returned more than the 5-star ones on the median. The 5-star group earned its place by falling less, swinging less and costing less.

The clearest case is Parag Parikh Flexi Cap, the top-scoring fund in the group. Its 3-year CAGR of 12.22% is the lowest of the four 5-star flexi caps. But its worst 3-year fall, −10.98%, and its volatility, 9.82%, are the lowest in the 5-star group too, and its Direct-plan expense ratio is 0.69%. Invesco India Flexi Cap has the highest 3-year return of the four, 16.40%, with the deepest fall of the four, −19.40%.

What this does not tell you

Stars are relative. A 5-star liquid fund and a 5-star small cap have nothing in common except that each beat its own peers. Stars never compare across categories.

Stars look backwards. Every input is history: three years of returns, three years of falls, today's expense ratio. A rating does not predict the next three years, and funds move between bands as the window rolls forward.

A 1-year rating is weaker. Over a third of 5-star funds are rated on a single year, which says much less than three.

A rating is not advice. It is a summary of past numbers, not a recommendation to buy, hold or sell.

Where to go from here

The methodology page sets out every formula behind the stars. The flexi cap page ranks the whole category, and the screener can filter by rating. The guide to risk-adjusted returns explains why a smaller fall can be worth more than a higher return. For the largest funds in the same category, see the largest equity funds by AUM.

For category medians to set a rated fund against, see the equity fund scorecard.