One of the best ways to create wealth is to invest in mutual fund schemes. In the medium to long term, these can fetch good returns. However, investors should consider selecting funds based on their financial goals, risk appetite and tenure of the investment. In this article we would provide the list of 10 Best Mutual Funds for Next 10 years to invest in India.
Why to invest in Mutual Funds?
Before getting into the specific list of mutual funds to invest for next 10 years, let us understand the fundamentals of mutual funds. While there are several investment options, mutual funds has been gaining prominence in the last few years. Some of the mutual funds have generated 10x to 12x returns in the last 10 years. Mutual Funds pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities, managed by professional fund managers.
What are the benefits of investing in mutual funds?
- Diversification: Mutual Funds does not invest in single stock or bond. They spread the investment across various assets which helps to reduce the risk.
- Professional Management: Expert fund managers make informed investment decisions on your behalf.
- Liquidity: Investors can buy and sell mutual fund units based on NAV (Net Asset Value) at any given point of time except where there is lock-in period.
- Transparency: Fund houses keeps providing updates on the portfolio.
- Affordability: Investors can invest as low as Rs 500 in mutual funds. In some funds they can invest even as low as Rs 100.
What is the Economic Outlook for India?
Before identifying the best mutual funds for the next 10 years, let’s assess the economic landscape of India and key factors shaping its growth.
- Demographic Dividend: With a young and dynamic population, India enjoys a significant demographic advantage, fueling consumption and economic growth.
- Infrastructure Development: Government initiatives and investments in infrastructure projects aim to enhance connectivity, spur economic activity, and attract investments. Our recommended Infrastructure mutual funds in 2022 have doubled in the last 2 years.
- Digital Transformation: The rapid adoption of digital technologies is revolutionizing various sectors, boosting efficiency and innovation.
- Emerging Sectors: Industries such as renewable energy, healthcare, and e-commerce present lucrative opportunities for investors, driven by evolving consumer preferences and technological advancements.
Best Mutual Funds for Next 10 Years to Invest in India:
Now, let’s explore the top 10 mutual funds to invest for next decade, considering factors such as historical performance, fund management expertise, and investment strategy. We have provided 2 table, one based on annualized returns and second based on SIP returns. One can use them like a model mutual fund portfolio for investments.
Best Mutual Funds for Next 10 Years – Annualised Returns
| Category | Mutual Fund Name | 3 Yrs | 5 Yrs | 10 Yrs |
|---|---|---|---|---|
| Index / Largecap | UTI Nifty 50 Index Fund | 16.2% | 14.8% | 13.8% |
| Index / Largecap | UTI Nifty Next 50 Index Fund | 23.2% | 19.0% | NA |
| Index / Largecap | Nippon India Largecap Fund | 26.8% | 18.8% | 18.4% |
| Index / Largecap | Baroda BNP Paribas Large Cap Fund | 19.8% | 18.0% | 16.2% |
| Midcap / Smallcap | Quant Mid Cap Fund | 38.3% | 35.3% | 21.9% |
| Midcap / Smallcap | SBI Small Cap Fund | 25.4% | 26.8% | 27.2% |
| Flexicap | Parag Parikh Flexi Cap fund | 22.7% | 24.5% | 20.0% |
| Flexicap | Quant Flexicap fund | 32.5% | 32.0% | 24.3% |
| Hybrid | ICICI Prudential Equity & Debt Fund | 26.2% | 26.0% | 19.8% |
| International | Motilal Oswal Nasdaq 100 FoF | 12.0% | 21.8% | NA |
Best Mutual Funds for Next 10 Years – SIP Returns
| Category | Mutual Fund Name | 3 Yrs | 5 Yrs | 10 Yrs |
|---|---|---|---|---|
| Index / Largecap | UTI Nifty Index Fund | 15.8% | 18.0% | 14.3% |
| Index / Largecap | UTI Nifty Next 50 Index Fund | 30.5% | 25.7% | NA |
| Index / Largecap | Nippon India Largecap Fund | 28.0% | 26.7% | 18.3% |
| Index / Largecap | Baroda BNP Paribas Large Cap Fund | 24.4% | 22.8% | 17.0% |
| Midcap / Smallcap | Quant Mid Cap Fund | 42.2% | 42.6% | 26.5% |
| Midcap / Smallcap | SBI Small Cap Fund | 25.8% | 30.1% | 23.6% |
| Flexicap | Parag Parikh Flexi Cap fund | 24.7% | 26.8% | 20.9% |
| Flexicap | Quant Flexicap fund | 34.0% | 38.0% | 25.4% |
| Hybrid | ICICI Prudential Equity & Debt Fund | 26.2% | 26.8% | 19.1% |
| International | Motilal Oswal Nasdaq 100 FoF | 19.2% | 19.9% | NA |
Investment Strategies for Long-Term Growth:
While selecting mutual funds for the next 10 years, it’s crucial to adopt a disciplined investment strategy aligned with your financial goals and risk tolerance.
- Asset Allocation: Diversify your portfolio across asset classes to mitigate risk and enhance returns.
- Systematic Investment Plan (SIP): Invest regularly through SIPs to benefit from rupee cost averaging and harness the power of compounding. One can easily make out 1 Crore with 5,000 per month SIP investments.
- Stay Informed: Keep an eye on market developments, economic indicators, and fund performance to make informed investment decisions.
- Review and Rebalance: Periodically review your investment portfolio and rebalance it to maintain optimal asset allocation and adapt to changing market conditions.
FAQs (Frequently Asked Questions):
To address common queries regarding mutual fund investments, here are some frequently asked questions along with detailed answers:
1. What are the key factors to consider when selecting mutual funds for long-term investment?
First step is to consider financial goal, risk appetite and tenure of investment. As a second step, when selecting mutual funds for long-term investment, consider factors such as historical performance, fund manager expertise, investment strategy, expense ratio, and risk-adjusted returns.
2. How can I assess the risk associated with mutual fund investments?
You can assess the risk associated with mutual fund investments by analyzing factors such as the fund’s investment objective, asset allocation, portfolio diversification, and historical volatility.
3. Is it advisable to invest in sector-specific mutual funds for long-term growth?
Investing in sector-specific mutual funds can be risky as it exposes your portfolio to concentration risk. It’s advisable to opt for diversified equity funds with exposure to multiple sectors for long-term growth.
4. What role does inflation play in mutual fund investments?
Inflation erodes the purchasing power of money over time, affecting the real returns on your investments. It’s essential to choose mutual funds that offer returns exceeding the inflation rate to preserve and grow your wealth. Investors should periodically check and should not end up in investing in bad funds which we indicated in our Worst Performing Mutual Funds in the last 10 year.
5. How often should I review my mutual fund investments?
It’s recommended to review your mutual fund investments periodically, typically every six months to a year, to ensure they remain aligned with your financial goals and risk tolerance. Make adjustments as necessary based on changes in market conditions or your investment objectives.
6. Can mutual funds help me achieve my long-term financial goals such as retirement planning?
Yes, mutual funds can play a crucial role in helping you achieve long-term financial goals such as retirement planning by offering the potential for capital appreciation and regular income through systematic investments over time. They should also build strategy and opt for Two Bucket Strategy of Investment which can help them to get maximum benefit.
Conclusion: In conclusion, selecting the best mutual funds for the next 10 years requires careful consideration of various factors, including economic outlook, fund performance, and investment strategy. By diversifying your portfolio across equity funds, adhering to a disciplined investment approach, and staying informed about market trends, you can build a robust investment portfolio geared towards long-term growth and wealth creation.