Are you exploring mutual fund investment ideas for 2025 and wondering which funds can offer solid returns? Perplexity AI, an emerging generative AI platform, has come up with a list of top-performing mutual funds that could be smart bets for long-term investors. These recommendations are based on historical returns, fund categories, expense ratios, and performance consistency. In this article, we will take a detailed look Best Mutual Funds to invest in 2025 as per Perplexity AI, understand what Perplexity AI is, why these funds are worth considering, and what risks investors should be aware of.
Earlier we wrote about Best Mutual Funds to invest in 2025 as per ChatGPT which you may also like to explore.
What is Perplexity AI?
Perplexity AI is an innovative generative AI-powered search and question-answering platform that has been gaining popularity for its ability to provide intelligent and data-backed responses. Unlike traditional search engines, it uses natural language processing and large language models to deliver concise and insightful answers. Recently, Perplexity has started offering investment suggestions, including recommendations in the mutual fund space, by analyzing historical data, market trends, and performance indicators.
While AI-generated investment insights should always be cross-verified with personal research or with a financial advisor, they do provide a solid starting point for retail investors.
Top 10 Mutual Funds to Invest in 2025 as per Perplexity AI
Here are the mutual funds recommended by Perplexity AI, along with their 5-year CAGR, Assets Under Management (AUM), and Expense Ratios:
| Rank | Fund Name | Category | 5-Year CAGR (%) | AUM (₹ Cr) | Expense Ratio (%) |
|---|---|---|---|---|---|
| 1 | Quant Small Cap Fund | Small Cap Fund | 49.6 | 24,892 | 0.68 |
| 2 | Quant Infrastructure Fund | Sectoral Fund – Infrastructure | 43.1 | 3,158 | 0.73 |
| 3 | Bandhan Small Cap Fund | Small Cap Fund | 38.1 | 9,516 | 0.5 |
| 4 | ICICI Prudential Commodities Fund | Thematic Fund | 40.00 | 2,614 | 1.22 |
| 5 | Nippon India Small Cap Fund | Small Cap Fund | 40.00 | 55,490 | 0.73 |
| 6 | ICICI Prudential Infrastructure Fund | Sectoral Fund – Infrastructure | 39.9 | 7,213 | 1.17 |
| 7 | Quant Flexi Cap Fund | Flexi Cap Fund | 36.0 | 6,712 | 0.61 |
| 8 | Quant ELSS Tax Saver Fund | Equity Linked Savings Scheme (ELSS) | 36.8 | 10,404 | 0.50 |
| 9 | Quant Mid Cap Fund | Mid Cap Fund | 35.9 | 8,355 | 0.62 |
| 10 | Bank of India Small Cap Fund | Small Cap Fund | 36.9 | 1,574 | 0.49 |
Mutual Funds by Category
Here is the classification of the recommended mutual funds based on their category:
1) Small Cap Funds:
- Quant Small Cap Fund
- Bandhan Small Cap Fund
- Nippon India Small Cap Fund
- Bank of India Small Cap Fund
2) Sectoral / Thematic Funds:
- Quant Infrastructure Fund (Infrastructure)
- ICICI Prudential Infrastructure Fund (Infrastructure)
- ICICI Prudential Commodities Fund (Commodities)
Out of above sector/thematic mutual funds, ICICI Pru Infra Fund and Quant Infra Fund are part of Google Gemini AI Mutual Fund Recommendations for 2025 too.
3) Flexi Cap Fund:
4) Mid Cap Fund:
5) ELSS (Equity Linked Savings Scheme):
- Quant ELSS Tax Saver Fund
This categorization helps investors understand the investment strategy and risk exposure of each fund more clearly and choose based on their financial goals and risk tolerance.
Why Should You Consider These Funds?
- Superior Returns: All these mutual funds have delivered stellar 5-year CAGR returns ranging from ~29% to over 41%. Such performance, especially in small and midcap categories, indicates their ability to ride market trends and identify high-growth opportunities.
- Diverse Categories: The list includes small cap, mid cap, flexi cap, infrastructure, commodities, and ELSS categories—offering diversification across sectors and investment styles. If you observe, Mutual Funds Recommendations from Meta AI for 2025 includes Debt Mutual Funds too which offers much more portfolio diversification.
- Experienced Fund Houses: Most of these funds are managed by reputed AMCs such as Quant Mutual Fund, ICICI Prudential, Nippon India, and Bandhan MF, which have strong track records.
- Reasonable Expense Ratios: Several funds in the list come with expense ratios under 0.7%, which helps in enhancing investor returns over the long term.
- Emerging Themes: Funds like ICICI Prudential Commodities and Quant Infrastructure Fund focus on niche, high-growth sectors that could benefit from government policies and economic recovery.
Risks of Investing in These Funds
While the past returns are impressive, investors must be aware of the potential risks:
- Market Volatility: Small and mid cap funds tend to be more volatile than large cap or hybrid funds. A market correction can significantly impact these portfolios. One can look at some of the Best Mutual Funds that has low Beta and high Alpha.
- Sectoral Risk: Sector/thematic funds such as infrastructure or commodities are cyclical in nature. They may underperform during economic downturns or unfavourable policy environments.
- Overconcentration in one AMC Mutual Funds: Out of the top 10 mutual funds recommended by Perplexity AI, 5 funds belong to Quant Mutual Fund. While Quant has outperformed in recent years, concentrating too much in a single AMC increases the risk if the fund house’s strategy or team performance falters.
- Short-Term Corrections: These funds have performed well over 5 years, but short-term performance may not always be consistent. As an example, look at Quant mutual funds performance in short term comparing to peers to understand this better.
- Liquidity Risks: Smaller AUM funds or those with sectoral focus might face liquidity issues during market stress periods.
Should You Invest in Perplexity AI’s Recommended Mutual Funds?
Perplexity AI’s list of top mutual funds to invest in 2025 includes a strong mix of high-growth and thematic opportunities, driven by data and past performance metrics. Investors looking for aggressive growth and willing to accept short-term volatility can consider allocating a portion of their portfolio to these funds.
However, one should not blindly follow AI-generated recommendations. Always consider your risk appetite, investment horizon, and financial goals before investing.
If you are a high-risk investor seeking long-term wealth creation, some of these funds can definitely find a place in your 2025 investment strategy.
Have you invested in any of these top-performing mutual funds? Do share your experience or thoughts in the comments section below!
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