Investing in mutual funds through Systematic Investment Plans (SIPs) is a smart strategy to build wealth over the long term. SIPs allow you to invest a fixed amount at regular intervals, making it easier to stay invested and benefit from rupee cost averaging. best sip investment plan for 10 years
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is an investment approach that enables you to invest a predetermined amount in mutual funds at regular intervals, such as monthly or quarterly. It is a convenient and disciplined way of investing, where a fixed sum is automatically deducted from your bank account and invested in your chosen mutual fund scheme.
5 Best SIP Plans For 10 Years In India To Invest In 2024
If you have a long-term investment horizon of 10 years and are looking for the best SIP plans to invest in, here are some top mutual fund schemes based on their past performance and expense ratios:
| Scheme Name | Category Name | AuM (Cr) | 3Y | 5Y | 10Y | Expense Ratio (%) |
| Quant Small Cap Fund - Direct Plan-Growth | Small Cap Fund | 20164.09 | 76% | 228% | 354% | 0.64 |
| Quant ELSS Tax Saver Fund - Direct Plan-Growth | ELSS | 9360.89 | 62% | 158% | 332% | 0.77 |
| Quant Mid Cap Fund - Direct Plan-Growth | Mid Cap Fund | 6920.17 | 79% | 178% | 310% | 0.62 |
| Quant Large and Mid Cap Fund - Direct Plan-Growth | Large & Mid Cap Fund | 2535.89 | 70% | 132% | 241% | 0.66 |
| Bank of India Manufacturing & Infrastructure Fund - Direct Plan-Growth | Sectoral/Thematic | 293.80 | 70% | 140% | 236% | 0.94 |
Note: Data as of May 31, 2024| Absolute Returns are Taken
An Overview of the Top SIP Plans Investment in India
Here's an overview of the top SIP plans mentioned above, including their performance, key features, and other details:
● Quant Small Cap Fund: Direct Plan-Growth This small-cap fund from Quant Mutual Fund has been around for over 11 years and was launched in January 2013. With an impressive asset base of ₹20,164.09 crores as of March 31, 2024, it is a medium-sized fund in its category. The fund charges an expense ratio of 0.64%, which aligns with other small-cap funds. Over the last 10 years, the fund has delivered remarkable returns of 354%, outperforming many of its peers. It has demonstrated a higher ability to deliver consistent returns than most funds in its category. Still, its ability to control losses in a falling market is below average. The fund's top sector exposures include Financial, Energy, Metals & Mining, Services, and Construction, with a relatively lower allocation to the Financial and Energy sectors.
● Quant ELSS Tax Saver Fund - Direct Plan – Growth: This Equity Linked Saving Scheme (ELSS) fund from Quant Mutual Fund has been around for over 11 years, launched in January 2013. With an AUM of ₹9,360.89 crores as of March 31, 2024, it is a medium-sized fund in its category. The fund charges an expense ratio of 0.77%, which is lower than most other ELSS funds. Over the last 10 years, the fund has generated impressive returns of 332%, making it an attractive option for long-term investors seeking tax benefits. It has demonstrated a higher ability to deliver consistent returns than peers. Still, its ability to control losses in a falling market is average. The fund's top sector exposures include Energy, Financial, Metals & Mining, Technology, and Consumer Staples, with a relatively lower allocation to Energy and Financial sectors.
● Quant Mid Cap Fund - Direct Plan – Growth: This mid-cap fund from Quant Mutual Fund has been around for over 11 years, launched in January 2013. With an AUM of ₹6,920.17 crores as of March 31, 2024, it is a medium-sized fund in its category. The fund charges an expense ratio of 0.62%, which aligns with other mid-cap funds. Over the last 10 years, the fund has delivered impressive returns of 310%, outperforming many of its peers. It has demonstrated a higher ability to deliver consistent returns and control losses in a falling market than most funds in its category. The fund's top sector exposures include Energy, Services, Financial, Healthcare, and Metals & Mining, with a relatively lower allocation to Energy and Services sectors.
● Quant Large and Mid Cap Fund - Direct Plan-Growth: This large & mid-cap fund from Quant Mutual Fund has been around for over 11 years, launched in January 2013. With an AUM of ₹2,535.89 crores as of March 31, 2024, it is a medium-sized fund in its category. The fund charges an expense ratio of 0.66%, which aligns with other large & mid-cap funds. Over the last 10 years, the fund has generated impressive returns of 241%, making it an attractive option for long-term investors seeking exposure to large and mid-cap companies. It has demonstrated a higher ability to deliver consistent returns and control losses in a falling market than peers. The fund's top sector exposures include Energy, Metals & Mining, Capital Goods, Financial, and Services, with a relatively lower allocation to the Energy and Metals & Mining sectors.
● : Direct Plan-Growth This sectoral/thematic fund from the Bank of India Mutual Fund focuses on the manufacturing and infrastructure sectors. Launched in January 2013, it has been around for over 11 years and has an AUM of ₹293.80 crores as of March 31, 2024, making it a small fund in its category. The fund charges an expense ratio of 0.94%, which is lower than most other sectoral/thematic funds. Over the last 10 years, the fund has generated impressive returns of 236%, making it an attractive option for investors seeking exposure to the manufacturing and infrastructure sectors. Its ability to deliver consistent returns is in line with its category average. Still, its ability to control losses in a falling market is below average. The fund's top sector exposures include Energy, Construction, Metals & Mining, Automobile, and Communication, with a relatively lower allocation to Energy and Construction sectors.
Who Should Invest in SIP for 10 Years in India?
Investing in SIPs for a 10-year horizon is suitable for individuals with long-term financial goals, such as retirement planning, children's education, or building a substantial corpus for future needs. A 10-year investment horizon allows ample time to ride out market volatility and benefit from the compounding effects of long-term investing.
Advantages of Investing in SIPs for 10 Years
There are several advantages to investing in SIPs for 10 years:
● Rupee Cost Averaging: By investing a fixed amount at regular intervals, you can benefit from rupee cost averaging, which helps average out the cost of your investments over time.
● Compounding Benefits: SIPs allow you to take full advantage of the power of compounding, where your investment gains generate additional returns over the long term.
● Disciplined Approach: SIPs encourage a disciplined approach to investing, as you commit to investing a fixed amount at regular intervals, regardless of market conditions.
● Long-term Wealth Creation: With a 10-year investment horizon, SIPs can potentially generate substantial wealth through the compounding effect and exposure to equity markets.
● Flexibility: SIPs offer flexibility in terms of investment amount, frequency, and the ability to pause or modify investments according to your financial situation.
How to Choose the Best SIP Plan for 10 Years?
When choosing a SIP plan for a 10-year investment horizon, it's essential to consider the following factors:
● Investment Objective: Determine your investment objectives, such as capital appreciation, income generation, or a combination.
● Risk Tolerance: Assess your risk tolerance level and choose a mutual fund scheme that aligns with your risk profile.
● Fund Performance: Evaluate the mutual fund scheme's past performance, keeping in mind that past performance does not guarantee future results.
● Expense Ratio: Consider the expense ratio of the mutual fund scheme, as it can significantly impact your overall returns over the long term.
● Fund Manager's Experience: Research the fund manager's experience and track record, as they can be crucial factors in the fund's performance.
● Asset Allocation: Diversify your investments across different asset classes and sectors to mitigate risk and enhance potential returns.
Risks & Challenges of Investing in Mutual Fund SIPs for 10 Years
While investing in SIPs for 10 years offers several advantages, it's essential to be aware of the potential risks and challenges:
● Market Volatility: Equity markets can be volatile, and there may be periods of significant ups and downs, which can impact your returns.
● Interest Rate Risk: Changes in interest rates can affect the performance of debt-oriented mutual funds, which may be part of your investment portfolio.
● Credit Risk: If you invest in debt funds, the issuer of the debt instrument may default, which can impact your returns.
● Inflation Risk: Over 10 years, inflation can erode the real value of your investments, reducing your purchasing power.
● Inflation Risk: Over 10 years, inflation can erode the real value of your investments, reducing your purchasing power.
● Liquidity Risk: While mutual funds are generally liquid investments, there may be situations where redemptions are restricted or delayed, affecting your ability to access your funds.
● Regulatory Changes: Changes in government policies, taxation laws, or regulations related to mutual funds can impact your investment returns and overall portfolio performance.
It's essential to consider these risks and challenges carefully before investing in SIPs for a 10-year years.
Conclusion
Investing in the best SIP plans for a 10-year horizon can effectively build long-term wealth and achieve your financial goals. By considering factors such as investment objective, risk tolerance, fund performance, and asset allocation, you can choose SIP plans that align with your investment strategy and potentially generate substantial returns over the long term.
