Originally published in May 2024. Fully updated in February 2026 with fresh perspective.
One of the most effective ways to build long-term wealth is through disciplined investing in mutual funds. Over long periods, equity-oriented mutual funds have the potential to generate inflation-beating returns and help investors achieve key financial goals such as children’s education, wealth creation, or retirement planning. However, selecting the best mutual funds for the next 10 years is not about chasing recent top performers. It requires aligning your investments with your financial goals, understanding risk, and choosing funds that can perform reasonably well across different market cycles.
In this updated article, we revisit our earlier list and present a refreshed framework to identify mutual funds that may be suitable for long-term investing over the next decade.
Why Invest in Mutual Funds for the Long Term?
Before getting into specific fund recommendations, let us understand why mutual funds continue to remain a preferred long-term investment option for retail investors in India.
Mutual funds pool money from multiple investors and invest across a diversified basket of equities, debt instruments, or a combination of both. These investments are managed by professional fund managers who actively track markets, valuations, and economic trends.
Over the last decade, several well-managed equity mutual funds have delivered multi-fold returns, proving that long-term investing backed by discipline and patience can significantly compound wealth.
What Changed Since 2024?
Markets and investing conditions have evolved meaningfully since this article was first published in 2024. Some important changes investors should be aware of:
- Indian equity markets have seen strong rallies, especially in mid-cap and small-cap segments, pushing valuations higher than long-term averages.
- Passive investing through index funds has gained significant traction due to lower costs and consistent performance.
- Certain actively managed funds have grown very large in size, making future outperformance more challenging.
- Regulatory focus on expense ratios and transparency has improved investor protection.
Because of these factors, investors should set realistic return expectations for the next decade and focus more on consistency rather than extraordinary past returns.
Economic Outlook for India (Next 10 Years)
Long-term mutual fund investing is closely tied to the broader economic growth story of the country. India continues to offer a favorable long-term outlook due to the following reasons:
- Demographic Advantage: A young and working-age population continues to support consumption-led growth.
- Infrastructure Push: Government-led infrastructure spending is expected to improve productivity and economic efficiency.
- Digital and Financial Inclusion: Digital payments, fintech adoption, and formalization of the economy are structural positives.
- Emerging Sectors: Renewable energy, healthcare, manufacturing, and technology-led services are expected to play a bigger role in future growth.
These factors collectively support long-term equity investing, though returns may be more moderate compared to the previous decade.
Best Mutual Funds for Next 10 Years (2026–2036)
Below is a carefully curated list of mutual fund categories that can form the core of a long-term portfolio.
Suggested Core Categories
- Index / Large Cap Funds
- Flexi Cap Funds
- Mid Cap and Small Cap Funds (limited allocation)
- Hybrid Equity-Oriented Funds
- International Equity Funds (optional diversification)
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 | 14.1% | 12.5% | 14.2% |
| Index / Largecap | UTI Nifty Next 50 Index Fund | 21.7% | 15.8% | NA |
| Index / Largecap | Nippon India Largecap Fund | 20.1% | 18.8% | 16.7% |
| Index / Largecap | ICICI Prudential Large Cap Fund | 18.9% | 16.7% | 16.3% |
| Midcap / Smallcap | HDFC Mid-cap Fund | 26.5% | 24.6% | 20.0% |
| Midcap / Smallcap | Bandhan Small Cap Fund | 31.4% | 25.4% | – |
| Flexicap | Parag Parikh Flexi Cap fund | 20.6% | 18.7% | 19.0% |
| Flexicap | HDFC Flexicap fund | 22.8% | 21.4% | 18.9% |
| Hybrid | ICICI Prudential Equity & Debt Fund | 20.1% | 20.5% | 17.6% |
| International | Motilal Oswal Nasdaq 100 FoF | 30.9% | 18.0% | 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 | 14.1% | 13.8% | 14.4% |
| Index / Largecap | UTI Nifty Next 50 Index Fund | 16.5% | 16.0% | NA |
| Index / Largecap | Nippon India Largecap Fund | 18.0% | 19.6% | 17.9% |
| Index / Largecap | ICICI Prudential Large Cap Fund | 18.0% | 18.1% | 17.1% |
| Midcap / Smallcap | HDFC Mid-cap Fund | 23.1% | 24.8% | 21.7% |
| Midcap / Smallcap | Bandhan Small Cap Fund | 26.6% | 26.2% | – |
| Flexicap | Parag Parikh Flexi Cap fund | 18.8% | 18.9% | 20.3% |
| Flexicap | HDFC Flexicap fund | 21.1% | 22.4% | 19.8% |
| Hybrid | ICICI Prudential Equity & Debt Fund | 18.5% | 19.7% | 18.7% |
| International | Motilal Oswal Nasdaq 100 FoF | 33.7% | 25.7% | NA |
Key Benefits of Investing in Mutual Funds
- Diversification: Mutual funds invest across multiple stocks or securities, reducing single-stock risk.
- Professional Management: Fund managers track markets and rebalance portfolios when required.
- Liquidity: Most open-ended funds allow investors to redeem units at prevailing NAV.
- Transparency: Investors receive regular portfolio disclosures and performance updates.
- Affordability: SIP investments can start with as little as ₹500 per month.
Long-Term Investment Strategy for the Next Decade
Simply selecting good mutual funds is not enough. How you invest matters just as much.
- Follow Asset Allocation: Do not invest everything in equity. Balance equity with debt based on your age and risk appetite.
- Stick to SIPs: SIPs help average market volatility and reduce timing risk.
- Avoid Performance Chasing: Funds that perform exceptionally well in one phase may underperform later.
- Review Periodically: Review your portfolio once or twice a year and rebalance if required.
- Stay Invested: Time in the market is more important than timing the market.
Risks Investors Should Be Aware Of
⚠️ Important Risk Disclosure
- Mutual fund investments are subject to market risks.
- Past performance does not guarantee future returns.
- Mid-cap and small-cap funds can be volatile in the short to medium term.
- High market valuations may result in lower returns over the next decade compared to the previous one.
Investors should align investments with their financial goals and consult a financial advisor if unsure.
Frequently Asked Questions (FAQs)
1. Is this the right time to invest in mutual funds when markets are high?
Rather than timing the market, investors should invest gradually through SIPs. Market corrections, if any, will automatically benefit SIP investors through lower NAV purchases.
2. How many mutual funds should I hold for long-term investing?
For most investors, 4–6 well-chosen mutual funds across different categories are sufficient for diversification.
3. Are index funds better than active funds for the next 10 years?
Index funds offer low cost and consistency, while active funds provide potential for outperformance. A mix of both can work well.
4. Should I stop SIPs during market corrections?
No. Market corrections are usually the best time to continue SIPs as they improve long-term return potential.
5. How often should I review my mutual fund portfolio?
A review once every 6–12 months is generally sufficient unless there are major changes in personal financial goals.
Conclusion
Selecting the best mutual funds for the next 10 years requires a long-term mindset, realistic expectations, and disciplined investing. Instead of focusing only on past returns, investors should prioritize fund consistency, diversification, and alignment with financial goals.
By investing regularly through SIPs, maintaining proper asset allocation, and staying invested across market cycles, investors can build a resilient mutual fund portfolio capable of delivering steady wealth creation over the next decade.
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Sir,
I am 72 years old. My investments are in Large cap funds, Retirement Benefit fund, Balanced advantage fund, multi asset fund in various AMCs since 2015. Total sums invested is Rs. 30 lacs and the market value is 59 lacs. Kindly advise, whether I should I continue with these funds or there are alternatives in mutual fund schemes aged person like me.
investing in largecap funds, balance advantage funds and multi asset fund are good. You can review and exit retirement benefit funds. Also keep your basics covered (insurance and emergency fund). Since your motto should be to protect capital too, I would recommend you to do portfolio balancing by investing in debt funds too that would provide fixed income. Investing entire in equity at your age is not advisable.
Nice article.
I request you to write article about portfolio balancing technique for someone once achieve enough corpus (ex: financial independence amount or 30*yearly expanse)
Sure Sudam
Hi Suresh,
I have 10 lacs and I might have to take it out for expenditure in an year or so(unclear but definitely within 2 years)
1. Where can keep this parked so it gives me better returns ( fd,bonds, tax savings etc is not an option for me)
2. Would there be a capital gain and how to handle the same?
3. Are there any other best practices that you can advise?
For short term of 1 to 2 years, I would recommend going for ultra short term mutual funds that can generate 7% to 8% annualised returns
Thanks Suresh..would also be able to advise on the other aspects like capital gain and any other best practices?
Hi Suresh,
I had no clear idea as to when I would take this money out so I invested in midcap 150 index and Nifty next 50 fifty index MF with (20:80) combo respectively.