15 Best SIP Plans to Invest for Next 10 Years

Systematic Investment Plans (SIPs) have become one of the most efficient methods for building wealth over time. By consistently investing a set amount, investors take advantage of systematic savings and the effects of compounding. A 10 year investment period is especially favorable, enabling investors to endure market fluctuations and obtain significant growth. In this guide, we will examine the 15 of the best SIP plans to invest for 10 years, helping you make informed choices that correspond with your financial objectives.

Investing via SIPs encourages a saving habit while enabling people to engage in the equity markets without requiring a significant initial amount. This approach makes investment more accessible, allowing individuals from different income levels to participate. As we explore this article further, we will discuss key aspects to take into account when choosing a SIP, the various types of SIPs offered, and particular plans that are notable for long-term investment.

What Makes a SIP Plan the Best for 10 Years?

Not all SIPs are created equal, and selecting the right plan requires careful evaluation. Here are the key factors to consider:

• Historical Performance: Looking at the past 5-10 years of a fund's performance shows us which economic conditions it successfully navigated. Looking at how your fund manager handled past market events helps show whether they can repeat their success in the future. A fund that regularly outperforms its measure of comparison is likely to stay strong, giving you better chances of making money.
• Consistency in Returns: Investors should look for funds that keep performing well in all kinds of market situations, not just when the market is growing. In difficult times, a fund that keeps giving steady returns is a better choice for long-term investment. The fund manager's ability to keep investments safe during market changes shows they know how to adjust their strategies and protect money from big losses.
• Fund Manager Expertise: A fund's success greatly depends on how its manager manages the investment funds. The performance track record, investment method, and experience with past comparable funds of the fund manager show you if they'd be good at handling your assets. Having a fund manager who demonstrated making money for investors in the past will help guide your investment choices over many years.    
• Expense Ratio: The mutual fund charges you an annual fee to handle your money. When a fund has lower expenses, more of your money stays invested and helps create returns. Over a decade, small variations in how much your fund charges you for management can significantly impact your total earnings. Choosing mutual funds with lower expense fees is the smart way to help your investments grow bigger.   
• Risk-Adjusted Returns: Invest in funds that deliver higher returns with reasonable risk levels. The Sharpe ratio helps you measure how well a fund makes money compared to the risk it takes on. When a fund shows better returns compared to its risk level, it offers investors more value over the long run.

With a 10-year period, you have the advantage of compounding, making it essential to choose plans that maximize growth potential while aligning with your risk tolerance and investment goals.

Overview of SIP Categories

Before getting into specific funds, it’s important to understand the types of SIPs available:

Types Of SIPs by asset class

1. Equity SIPs: A majority of your funds are allocated to stocks and equity-oriented investments, and equity SIPs can substantially enhance your financial growth over multiple years. Such SIPs should solely be utilized by investors who are at ease with elevated risks and possess the time to maintain their investments for a prolonged period - similar to individuals saving for retirement or funding their children’s education.   
2. Debt SIPs:  Debt SIPs place your money into bonds, government bonds, and loans for corporations. People who prefer steady returns and low risk tend to choose debt SIPs over equity SIPs because these financial tools tend to be safer and less volatile.    
3. Balanced (Hybrid) SIPs: Hybrid SIPs match their goals by placing money into various equity and debt investments at the same time. This blend of investments is perfect for those who want reasonable risk and fair returns.
4. Index Funds SIPs: Index funds match market index performance, either Nifty 50 or Sensex. These SIPs offer cheap ways to spread your money and people who believe that stocks will keep growing over time and want to buy and hold their investments will like them.

Types Of SIPs by Market Capitalization

• Large-Cap Funds: These funds invest primarily in large-cap companies, which are well-established and have a substantial market presence. They typically feature among the top 100 companies in terms of market capitalization and are often recognized brands whose products or services are widely used by Indian consumers. People view them as safer than mid-cap and small-cap funds because they deliver consistent results.   
• Mid-Cap Funds: Mid-cap funds concentrate on investing in companies that are midsize but have strong potential to grow rapidly. Mid-cap funds grow faster than large-cap funds, but you'll face more risk when you invest.  
• Small-Cap Funds: Small-cap funds buy shares of smaller companies with strong growth chances, but these companies also face the greatest danger among all three market size groups. The funds work best for investors who can accept greater risk and are committed to holding their investments for many years.
• Multi-Cap Funds: Unlike funds that focus on specific market-cap, multi-cap funds invest in various market caps at once - from large to medium and small companies. Investing in multi-cap funds offers you a mix of company sizes while giving the fund manager free reign to choose which stocks perform best in different market conditions.
• Mega-Cap Funds: While less common than other categories, mega-cap funds operate only with very large companies. Big market players that own the biggest companies on the stock market. Buying into mega-cap money funds lets you have steadier returns compared to funds invested in small-cap companies.
• Micro-Cap Funds: Micro-cap funds buy shares of the smallest and least known publicly traded companies. Investors will face the most significant risks here, but they can also earn the biggest earnings. Smaller investors need to take a big risk and have many years of holding time before thinking about investing in these funds.

Other Categories:

Beyond the above, there are several specialized categories of SIPs:

• Sectoral Funds: These investment vehicles zero in on particular economic areas, such as technology, healthcare, and energy. They earn more but are risky because they put all their money into limited places.
• Tax-Saving Funds (ELSS): These investment accounts, also known as Equity Linked Savings Schemes (ELSS), offer tax benefits. They allow you to reduce your taxable income by up to INR 1,50,000 under Section 80C of the Income Tax Act. This means that a portion of your investment returns remains tax-free, while the invested amount is locked in for 3 years. 
• Index Funds: These funds follow a particular market index, offering extensive market coverage and cost-effective diversification. 
• Thematic Funds: These funds allocate capital to businesses that adhere to a particular theme, like infrastructure, rural advancement, or ecological sustainability. 

Key Differences

This distinction ensures you understand the context of different SIP types and choose based on your goals and risk appetite.

15 Best SIP Plans for a 10-Year Period

Large-Cap Funds

1. Axis Bluechip Fund: An option for investors looking for stable blue-chip stocks to rely on. The fund, with its average 15% yearly gains over 10 years, shows balanced risk and a low management charge of 0.54%, making it an ideal option for people who want consistent results but not too much uncertainty.
2. ICICI Prudential Bluechip Fund: This large-cap fund keeps earning money predictably, giving investors an average return of about 14% over ten years. Though risky in the middle range, and costing around 1.06%, it's still a smart choice for people who want stable earnings.
3. Canara Robeco Bluechip Equity Fund: It features a 10-year annualized return of around 13.5%, possesses a moderate risk profile, and has a low expense ratio of about 0.51%. Individuals seeking a secure and reliable large-cap fund appreciate this fund for its prudent management of investments. 

Mid-Cap Funds

1. HDFC Mid-Cap Opportunities Fund: A perfect option for investors looking to invest in mid-cap firms with considerable growth prospects. In the past decade, this stock fund has achieved an average annual return of 19%. The fund assumes greater risks and imposes a fee of roughly 0.80%.   
2. Nippon India Growth Fund: Over the past decade, this mid-cap fund provided investors with an average annual return of about 18%. Investors looking to increase their financial returns can place their funds in this high-risk investment option, which has comparatively low management fees around 0.90%. 
3. PGIM India Midcap Opportunities Fund: This fund distinguishes itself by selecting mid-cap firms expected to experience rapid growth and are founded on strong fundamentals. It offers excellent returns, making it an appealing method to grow your collection of mid-cap stocks. 

Small-Cap Funds

1. SBI Small Cap Fund: Designed for high-risk investors looking for aggressive growth, this fund has achieved a 10-year annualized return of approximately 23%. This small-cap fund, with an expense ratio of about 0.76%, presents considerable growth opportunities for investors ready to take on more risk. 
2. Franklin India Smaller Companies Fund: Investors looking to invest in small-cap companies should look at this fund, which offers significant returns but entails above-average risk. The fund provides investors an average annual return of approximately 17% over the last decade, with a fee of just 1.20%. It's an appealing option for individuals looking to invest in smaller firms with the potential for growth. 

Hybrid Funds

1. DSP Equity Opportunities Fund: This fund lets your investments grow by splitting your money equally between large and mid-sized companies. The fund carries moderate risk, but gives solid returns of about 18% per year. People who want their investments split across mid-cap and large-cap stocks can choose this one.
2. Parag Parikh Flexi Cap Fund: This mutual fund gives investors choice and growth, earning roughly 16% every year over the last 10 years. Due to an efficient management fee of 0.89%, this investment gives equal access to both Indian and global company stocks.

Sectoral Funds

1. Tata Digital India Fund: This fund appeals to investors keen on capturing the growth potential of the technology sector. Despite being significantly risky, this fund generated returns of about 22% per year for the last ten years. The cost of managing investors accounts sits at 1.25% due to its specific focus on promoting digital improvements across businesses.

Tax-Saving Funds

1. Canara Robeco Equity Tax Saver Fund: One of the best-performing funds in the ELSS category, this helps investors lower their taxes under Section 80C of the Income Tax Act. Since it delivers strong performance, the fund stands out for people who want to save taxes while building wealth gradually over time.

Index Funds

1. UTI Nifty Index Fund: Buyers looking for a low-cost way to mirror the Nifty 50's movements will find this fund ideal. Consistently returning an average of 12% per year for the last decade, plus an affordable management fee of 0.20%, UTI Nifty Index Fund offers straightforward index following with low exposure to risk.

Miscellaneous

1. Mirae Asset Emerging Bluechip Fund: The Mirae Asset Emerging Bluechip Fund lets investors grow their money by putting their funds into rising small businesses. Over the past decade, this equity fund has earned approximately 20% annual returns by trading with large and medium-sized company stocks. Investors are attracted to its risk level, but they need to pay more with a 0.67% fee to make this happen.
2. L&T Midcap Fund: This fund is special because it finds small-to-midcap companies when they're cheap and buys them to match what investors want to earn over time. If you want to buy mid-cap stocks and want your money to grow fast, this fund is something you should watch closely.

How to Choose the Right SIP for Your Goals?

Before choosing the right SIP you need to think about your investments, what you hope to gain, and how much risk you can handle. Here are some key factors to guide your decision-making process:

• Risk Tolerance: Learning which risks you can handle helps you choose the right investment options. If you want lower danger, pick debt or blue-chip stock funds. Those who can handle risk more should go for mid-cap or small-cap funds.   
• Financial Goals: Match your SIP investments to match your financial targets: saving for retirement, creating funds for your children's education, or putting away money to buy a house in the future. Knowing your goals makes it easier to pick the kind of investment fund you need.   
• Diversification: Putting your money in many different investment types and fund choices decreases your chance of losing money but increases your overall earning potential. Split your investment money into three types of funds - big, average, and small - to create a balanced investing plan.   
• SIP Calculators: Free online SIP calculators show you how much cash you could end up with, based on what you deposit, when, and how your investments do in the market. The tools assist us in planning our financial goals more accurately and assist us in making good investment decisions.

Benefits of Investing in SIPs for 10 Years

Investing in SIPs for a 10-year period offers several compelling advantages:

• Compounding: Your earnings from investing keep earning even more, which grows your money faster and faster. Placing money on a safe investment for 10 years lets you give compounding enough time to grow your wealth.   
• Rupee Cost Averaging: Regular fixed payments into SIPs help you manage risk by spreading your investments across different market movement phases. When stock prices are down, buying more units lets you save money. When prices go up, you buy fewer units to avoid overspending. Over time, this method makes your investment costs consistent. 
• Tax Benefits: Certain SIPs, such as those in Equity Linked Savings Schemes (ELSS), offer tax benefits under Section 80C of the Income Tax Act. These tax savings can further enhance your investment returns.

Potential Risks and How to Manage Them

While SIPs offer numerous benefits, it's essential to acknowledge the potential risks involved and adopt strategies to manage them effectively:

• Market Fluctuations: Your investment results could change a lot due to sudden market movements. All the same, holding onto an investment for 10 years helps you survive market ups and downs while enjoying future gains.   
• Fund Performance: The performance of a mutual fund is subject to market risks and may not always meet expectations. It's crucial to periodically review your investments and ensure that the chosen funds continue to align with your financial goals.  
• Concentration Risk: Investing most of your money in one fund or sector makes you vulnerable to big market losses. Investing in multiple funds and different kinds of assets helps protect your financial portfolio if the market changes.

Conclusion

Investing in SIPs over the next decade offers a structured approach to wealth creation that is both disciplined and strategic. By understanding various types of funds available, evaluating their historical performance meticulously, and aligning them with your financial aspirations, you can make informed decisions that secure your financial future effectively.

Remember that regular reviews and adjustments to your portfolio will help you stay aligned with changing market conditions while achieving your long-term investment goals efficiently.