The Best SIP Mutual Funds for a 10-Year Investment Plan
As you are planning to invest Rs.5000 SIP for 10 years in mutual funds, we recommend considering equity funds. Equity investments may be volatile in the short or medium-term, but they historically have outperformed other asset classes over the long term. The goal is to identify funds that provide good returns consistently over a period of time.
Top Mutual Fund Categories for a 10-Year SIP Plan
Here are 5 specific categories of mutual funds that can suit most investors and form a core part of your portfolio:
Large CapLarge Mid CapMuli-CapFlexi CapELSS (Equity Linked Savings Scheme)We ranked these funds based on at least 10 years of performance history. Some of the top-performing funds that meet our criteria are listed below.
Methodology to Pick Best Mutual Funds
We used the quartile system to identify the best funds. The top 25 of performers are Q1 (Quartile 1). Funds coming in the range 25-50 are labeled as Q2, 50-75 as Q3, and the least performing 25 of funds are Q4. We looked for funds that have remained in the Q1 for at least 7 years. Here are the funds that meet this criterion:
Axis Long Term Equity FundMirae Asset Emerging Blue-chip FundInvesco India Multi Cap FundIt's important to note that while these funds have consistently performed in the top quartile, there may be periods of underperformance. For instance, Invesco India Multi Cap fund spent 3 out of the last 5 years in Q4, though it was consistently in Q1 from 2011 to 2015.
Additional Funds in Q1 for Over 5 Years
We further looked for funds that have been in the Q1 for more than 5 years. Here are 8 such funds:
Mirae Asset Emerging Blue-chip FundAxis Long Term Equity FundInvesco India Flexi Cap FundICICI Prudential Mid Cap FundUTI Large Cap FundShriram Balanced FundMirae Asset Direct Plan (Mid Small Cap)Axis Blue Chip FundConclusion and Final Advice
While this list provides a good starting point, the perfect fund for every investor does not exist. You should do your own research and compare the above-mentioned schemes according to your needs. Utilize the ETMoney app to explore these options further.
By choosing the right mutual funds, you can build a strong diversified portfolio for a long-term investment plan. This is just a guide, and the best approach will depend on your specific financial situation and goals. Happy investing!
Hope this helps!