Investing in Mutual Funds for Long-Term Growth in India: Best Options and Strategies

Investing for the long-term can be a wise decision, especially when choosing between different asset classes. Among them, equity mutual funds have historically outperformed other asset classes, making them an attractive investment option for those with a long-term horizon.

Best Performing Debt Mutual Funds

The following table highlights some of the best performing Debt Mutual Funds in India, based on their three and five-year returns. Choose wisely to ensure good returns over the long term.

Fund Name 3-Year Return 5-Year Return Data Source Fund 1 4.41 9.45 Data Source Fund 2 5.26 8.99 Data Source Fund 3 5.54 8.88 Data Source Fund 4 4.50 8.84 Data Source Fund 5 13.97 8.83 Data Source Fund 6 3.76 8.81 Data Source Fund 7 4.38 8.77 Data Source Fund 8 5.43 8.67 Data Source Fund 9 5.52 8.62 Data Source Fund 10 5.91 8.55

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For a long-term investment strategy, equity mutual funds are an excellent choice. They have historically provided superior returns compared to other asset classes over extended periods. To make informed decisions, we have compiled a list of Equity Mutual Funds, not just based on their returns but also their consistency over time.

Our list is broken down into five specific categories: Large Cap, Large-Mid Cap, Multi Cap, Flexi Cap, and ELSS (Equity Linked Savings Scheme). These categories are suitable for most investors and can be part of your core portfolio.

Selecting the Best Schemes

To identify the best schemes, we focused on funds with at least ten years of performance history. We used a quartile system to analyze the funds. In this system, the top 25% of performers are labeled as Q1, the next 25% as Q2, the next 25% as Q3, and the bottom 25% as Q4. Here are the funds that have consistently performed in the top quartile:

Axis Long Term Equity Fund (remains in Q1 for more than 7 years) Mirae Asset Emerging Bluechip Fund (remains in Q1 for more than 7 years) Invesco India Multicap Fund (remains in Q1 for more than 7 years)

However, it is essential to dig deeper into the data. For instance, the Invesco India Multicap Fund, while having a consistent performance in the past, has shown relatively poor performance in recent years. It spent 3 out of the last 5 years in the Q4 quartile, while Invesco India Multicap Fund performed consistently in the Q1 quartile from 2011 to 2015.

Further Analysis

We then looked for funds that have been in the top quartile for more than 5 years. Here are the eight such funds:

Axis Long Term Equity Fund Invesco India Multicap Fund Mirae Asset Emerging Bluechip Fund Aditya Birla Sun Life Equity Advantage Fund Canara Robeco Emerging Equities Fund Invesco India Tax Plan Fund Principal Emerging Bluechip Fund SBI Focused Equity Fund

We relaxed our criteria to include funds that have spent at least 70% of their time in the top two quartiles (Q1 or Q2). Here are the eleven funds:

Aditya Birla Sun Life Equity Advantage Fund Axis Long Term Equity Fund BNP Paribas Large Cap Fund DSP Tax Saver Fund Invesco India Multicap Fund Invesco India Tax Plan Fund Kotak Flexicap Fund Mirae Asset Emerging Bluechip Fund Mirae Asset Large Cap Fund SBI Bluechip Fund SBI Focused Equity Fund

No fund can be perfect for everyone. These lists are not exhaustive. Your research may lead you to different conclusions. Use the ETMoney app to conduct your own research and compare the above-mentioned schemes according to your specific needs.

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