Best ways to invest money in mutual fund for 10 Years
The best Systematic Investment Plans (SIPs) have the potential to grow your wealth over the long term while simultaneously weathering the impact of short term fluctuations.
In this blog, we’re going to tell you about the 12 best SIP mutual funds handpicked by our advisor, Wealth First. But before we jump in, let’s look at the benefits of investing using SIPs.
Why Should You Invest In SIP Or Systematic Investment Plan?
Investing in the best SIPs is one of the smartest ways to generate wealth across market cycles. That means whether the markets go up or down you continue investing. Let’s look at all the SIP mutual fund benefits in depth.
1. High Returns:
The best SIPs in equity or international mutual funds have the potential to compound. This can help investors accumulate a large sum of money in the future. These funds have been known to generate close to 10-18% returns over 5+ years.
For example, here’s a hypothetical example of what could happen if you invested ₹10,000 per month each in an equity (@12%) or an international fund (@15%) for 10+ years.
|10-Year SIP Returns
|20-Year SIP Returns
2. Rupee Cost Averaging:
Rupee cost averaging ensures you buy:
- More shares when the markets are down
- Fewer shares when the markets are up
This will average out the impact of short term fluctuations and save you from the hassle of choosing the right time to invest. Here’s a hypothetical example of rupee cost averaging at work in SIPs Vs lump sum:
A SIP is affordable because you don’t have to invest a large sum of money or lump sum. Instead, you invest a small amount of money, as low as ₹1000, every month or quarter.
Aditya Birla Sun Life Digital India Fund:
Investment objective: Aditya Birla Sun Life Digital India Fund is a multi-sector, open-ended growth scheme whose objective is long-term capital growth with 100% target allocation through the portfolio. It focuses on investing in technology and technology-based sectors, hardware, software, telecom, media, internet, e-commerce, peripheral and components, and such companies. The secondary objective of this scheme is to generate income and distribute dividends.
Aditya Birla Sun Life Digital India Fund is an equity-sector-based scheme launched on 15th January 2000.
This fund carries a high risk and offers an annualized return of 12.9% since its start. It is ranked 33 in the sectoral category.
Franklin India Technology Fund
Investment objective: To generate a long-term capital appreciation by predominantly investing in equity and equity-based securities of technology and technology-related companies.
Franklin India Technology Fund is an equity-sectoral fund that was launched on 22nd August 1998.
This fund contains high risk and gives an annualized return of 20.2% from the beginning.
It is ranked 41 in the sectorial list.
ICICI Prudential Technology Fund:
Investment objective: To generate long-term capital from a portfolio of equity and equity-related securities of technology-intensive companies.
ICICI Prudential Technology Fund is an equity-sectorial fund launched on 3rd March 2000.
It has a high risk involved but an annualized return of 13.8% since the launch.
ICICI Prudential Technology Fund is ranked 37 in the sectorial category.
PGIM India Global Agribusiness Offshore Fund:
Investment objective: the primary objective of this scheme is to deliver long-term capital growth by investing predominantly in units of overseas mutual funds. These mutual funds would focus on agriculture and agriculture-based business and development sectors.
PGIM India Global Agribusiness Offshore Fund was launched on 14th May 2010.
It is a high-risk fund and offers an annualized return of 12.9% since its launch.
It ranked 33 in the fund of fund category.
SBI Technology Opportunities Fund:
Investment objective: SBI Technology Opportunities Fund aims to provide maximum possible growth opportunities to the investors through equity investment using stocks of the economy’s growth-oriented sectors.
SBI Technology Opportunities Fund is an equity-sectoral fund that was launched on 9th January 2013.
It has a high risk and provides an annualized return of 24.5% consistently.
TATA Digital India Fund:
Investment objective: To generate a long-term capital appreciation by investing at least about 80% of the net shares in equity or equity-related instruments in the Information Technology sector. However, the Tata Digital India Fund Scheme does not provide the investor with any guarantee or assurance that the investment objective can be achieved.
TATA Digital India Fund is an equity sector fund launched on 28th December 2015.
This fund possesses a high risk and gives an annualized return of 26% since its launch.
Mirae Asset Large Cap Fund:
You can access the stock of some of the biggest companies and industry leaders in India like Infosys, HDFC Bank, Reliance Industries, TCS, and others by investing in Mirae Asset Large Cap Fund.
These companies are known as “large-cap” because of their stellar market capitalisation. In fact, more than 80% of Mirae Asset Large Cap Fund’s portfolio includes the shares of the top 100 Indian companies.
- Type: Large-cap fund
- 1-year returns: 29.10%
- 3-year returns: 19.14%
- 5-year returns: 17.88%
Here’s a snapshot of the top stocks held by Mirae Asset Large Cap Fund.
|State Bank of India
Canara Robeco Emerging Equities Fund:
Canara Robeco Emerging Equities Fund essentially invests in large-cap and mid-cap companies that have the potential to become sector leaders in the future. This includes the likes of Axis Bank and Max Healthcare.
Furthermore, the fund managers are known to invest in high-quality companies instead of following the crowd and chasing short term profits. Over 50% of the fund’s portfolio is large-cap oriented.
- Type: Large & mid-cap fund
- 1-year returns: 37.58%
- 3-year returns: 23.82%
- 5-year returns: 20.39%
Here’s a snapshot of the top stocks held by Canara Robeco Emerging Equities Fund.
|State Bank of India
Axis Focused 25 Fund:
You can access 25 of the best stocks in total from the large-cap, mid-cap, and small-cap categories by investing in Axis Focused 25 Fund. It’s a focused fund that can invest in up to 25 stocks, as the name suggests.
The aim of the fund is to generate long term returns with highly diversified stocks from different sectors like Info Edge, Avenue Supermarts, Pidilite Industries, and others.
- Type: Flexi-cap (focused) fund
- 1-year returns: 24.95%
- 3-year returns: 21.08%
- 5-year returns: 20.43%
Here’s a snapshot of the top stocks held by Axis Focused 25 Fund.
|Bajaj Finance Ltd
|Tata Consultancy Services Ltd
|Info Edge (India) Ltd
|Avenue Supermarts Ltd
|Divi’s Laboratories Ltd
Best Debt Fund SIPs For 10-20 years
Debt funds are generally considered to fall under the low risk, predictable rewards category. They invest in debt instruments like government bonds, corporate bonds, money market instruments, and more.
IDFC Banking & PSU Debt Fund
Starting a SIP in the IDFC Banking & PSU Debt Fund will allow you to access high-rated (AAA) bonds, certificates of deposit (CDs), commercial paper (CP), and other debt securities issued by PSUs and banks.
- Type: Banking & PSU fund
- 1-year returns: 3.37%
- 3-year returns: 8.48%
- 5-year returns: 7.62%
Here’s a snapshot of the top debt securities held by IDFC Banking & PSU Debt Fund.
|Bond: National Bank For Agriculture and Rural Development
|Bond: Axis Bank Ltd
|Bond: Indian Railway Finance Corporation Limited
ICICI Prudential Corporate Bond Fund
There are debt funds that invest in bonds issued by large corporations. ICICI Prudential Corporate Bond Fund is one of these debt funds. It primarily invests in corporate bonds rated AA or above.
The average SIP return in the last 10 years produced by ICICI Prudential Corporate Bond Fund is more than 8%, which is far better than most bank FDs and savings accounts.
- Type: Corporate bond fund
- 1-year returns: 8.11%
- 3-year returns: 7.33%
- 5-year returns: 7.93%
Here’s a snapshot of the top debt securities held by ICICI Prudential Corporate Bond Fund.
|Bond: GoI Floater 2033
|Bond: NABARD (GoI)
|Bond: Reliance Industries
HDFC Money Market Fund
You can access high-rated bonds, T-bills, commercial paper, and other money market securities that mature in up to 1 year by investing in the HDFC Money Market Fund.
The average returns of this mutual fund in the past 10 years has been approximately 7.70%, which is better than most bank FDs.
- Type: Money market fund
- 1-year returns: 3.78%
- 3-year returns: 6.10%
- 5-year returns: 6.43%
Here’s a snapshot of the top debt securities held by HDFC Money Market Fund.
|CP: Reliance Industries
|CP: Reliance Jio Infocomm
Best International Fund SIPs For 10-20 years
International funds are Indian mutual funds that invest in the shares of foreign companies like Apple, Amazon, Novartis, etc. They may even invest in the units of foreign mutual funds and ETFs.
Given their investment type, international funds are a high-risk, high-reward category of mutual funds that are suitable for the long term.
Edelweiss Greater China Equity Off-shore Fund
Edelweiss Greater China Equity Off-shore Fund invests in the JPMorgan Funds – JF Greater China Equity Fund that can give you access to top Chinese stocks Taiwan Semiconductor, Tencent, Alibaba, and more.
This is a “Fund of Fund” scheme that invests in another mutual fund instead of stocks or bonds. Cube’s advisor Wealth First has picked this as one of the best mutual funds for the long term as of 10-2021.
- Type: Fund of fund
- 1-Year Returns: -8.15%
- 3-Year Returns: 29.46%
- 5-Year Returns: 19.93%
Here’s a snapshot of Edelweiss Greater China Equity Off-shore Fund’s top holding.
|JPMorgan Funds – Greater China Fund
Franklin India Feeder – Franklin U.S. Opportunities Fund
Certain mutual funds are known to operate in a feeder-master relationship where the feeder fund pools money from investors and invests it in the master fund.
That’s how Franklin India Feeder – Franklin U.S. Opportunities Fund operates. The master fund, Franklin U.S. Opportunities Fund can give you access to top US stocks like Apple, Amazon, Google, Microsoft, and more.
- Type: Feeder fund
- 1-Year Returns: 17.22%
- 3-Year Returns: 32.75%
- 5-Year Returns: 23.07%
Here’s a snapshot of Franklin India Feeder – Franklin U.S. Opportunities Fund’s top holding.
|Franklin U.S. Opportunities Fund
How to Choose the SIP to Invest in?
Here are some of the parameters that you need to look into before choosing a scheme through SIP:
- Investment objectiveWhether your goal is short-term or long-term, you can choose debt and money market funds or equity funds, respectively. Make sure to assess the risk and returns and align it with your objective before proceeding to apply.
- Know the fund houseWhile choosing, gain a good idea of the houses in your options before picking them up because they will make decisions for your investment on your behalf.
- Performance of the fundThe ultimate goal is to fetch good results. Study the returns for the previous years and compare them with other funds.
What are the Benefits of Investing in SIPs?
Some other benefits of investing in SIPs are as follows:
- Power of compoundingAfter several years, a small amount of money invested at the beginning of the investment will give you a huge return. This is called compounding. Hence, you can get a large sum by investing in the long-term with small but regular investments.
- Rupee Cost Averaging SIPs help in averaging the Cost return ratio. This means, through SIPs, regular investors who invest small amounts can harvest huge profits than those who invest a large amount at the same time.
- Automated paymentsIt is natural for a regular investor to miss out on payment once in a while. But when it comes to SIP, you need not worry about this because your monthly payment shall be auto-debited from your bank account automatically on the predefined date.
- Emergency useSIPs provide you with a facility where you can withdraw money when and where necessary. In case of emergencies, you can make a one-step withdrawal anytime.
The top fund houses that provide the best SIP to invest for 10 years are discussed above with their investment objective, the type of investment, and other features. To analyze the performance of each fund, you can study the benchmark index.
Through SIPs, you can hassle-freely invest your money in a fund of your choice. Choose them carefully with the help of the given parameters and ensure you don’t regret it in the future.