In India, systemic investment plans, or SIPs, are growing in popularity. There is a consistent trend in data from the Association of Mutual Funds of India (AMFI) indicating that SIPs are becoming more popular than lump sum investments. By investing a set amount regularly, SIPs enable you to buy more units during bear markets and fewer during bull ones, lowering the average cost over time.
SIPs also encourage financial discipline by automating the process of making investments. Crucially, SIPs can be started with small sums of money, accommodating a range of income levels. Compounding returns have the potential to significantly increase your investment over time.
Over the last 10 years, some mutual funds have shown higher annualized SIP returns (XIRR). For those who do not know, the most accurate way to measure the returns on SIP investments is to use the XIRR. Compared to traditional return calculations, it is a superior metric because it accounts for the irregular cash flows that are typical of SIPs. A lot of mutual funds show off their 10-year XIRR performance to highlight the long-term benefits of systematic SIP investing.
Based on historical performance (although past performance is not indicative of future results), the table below showcases the top-performing mutual funds that have generated wealth for investors who have remained persistent and maintained their investments for a decade or longer.
Name of the fund | Nature of the fund | 10-year returns(in %) |
Nippon India Small Cap Fund | Small cap fund | 26.43 |
Quant Small Cap Fund | Small cap fund | 22.54 |
Baroda BNP Paribas Large Cap Fund | Large cap fund | 16.44 |
Franklin Build India Fund | Thematic fund | 22.85 |
JM Flexi Cap Fund | Flexi cap fund | 20.67 |
Invesco India Contra Fund | Contra fund | 19.78 |
| Source: AMFI (As of July 30, 2024) | ||
Giving investors a table of the best-performing mutual funds over the last 10 years helps investors decide which fund can be the next best addition to their investment portfolios. Still, it’s critical to remember that:
- Market conditions change: Previous achievements might not translate into future success.
- Fund manager changes: A change in the fund management team can have a significant impact on performance.
- Risk profile: Investors ought to select funds in line with their investing goals and risk tolerance.
Those looking to make money in the stock market may want to think about investing in mutual funds, which offer a reliable way to build wealth by combining the money of several investors to buy a variety of securities.
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First Published:
31 Jul 2024, 10:01 AM IST
Business NewsMutual FundsTop 6 mutual funds that have helped investors create wealth over the past 10 years
