Best Mutual Funds for 10-Year Investment in India

Published: 11 October 2025

Updated: 11 October 2025

Building wealth takes time, and staying invested with patience is often more powerful than quick decisions. There is nothing certain about short-term investing because markets go up and down. That is why many experts suggest having a 10-year investment horizon. Over 10 years, mutual funds not only escalate gains through compound interest but also lessen the impact of market volatility, thereby giving you a better chance of acquiring real wealth.

This blog will look into the best mutual funds for 10 year investment in India, the benefits of choosing 10 years as a time span, and guide you across different fund categories. The purpose of this blog is to educate, while not explicitly giving out a financial recommendation. Read on to learn how to choose the best mutual funds for long-term investment in India to plan your financial objectives.

Why 10-Years Is an Ideal Investment Horizon

Here's why a time span as wide as 10 years really helps:

It Begins With Compounding: Your returns start churning out further returns. For instance, interest or dividends being reinvested, along with further capital gains, generate additional growth. It gets more powerful depending on how long an investor stays invested. (This is basic financial theory; many SIP and equity-market experiments back this.)
Volatility in the Market Gets Smoothened: Noises of fluctuations for 1-3 years are most irritating, especially for equities or more aggressive categories. In contrast, if you go for ten years, markets have enough chance to get back their composure post any shocks.
Better Wealth Creation: In the long term, those growth trends follow economic growth, corporate expansion, increasing incomes, innovation, and so forth. Inflation is a less ferocious robber when one shows patience for 10 years, provided that such returns do beat inflation.
Goal-Based Planning Is Better: In terms of retirement, children, education, huge assets (home, business), 10 years gives enough time to plan, rebalance, and tweak when required, instead of reacting offhandedly.

Several guides talking about Indian mutual funds and SIPs place 8-10 years as a minimum horizon for good equity returns.

Mutual Fund Categories to Consider for 10-Year Investment

Each category has different risk-return trade-offs. To build a resilient portfolio over 10 years, blending several makes sense.

Category	What it means	Pros / Cons	Best For
Large-Cap Equity Funds	Funds investing predominantly in large, well-established companies (top 100 by market cap, etc.).	With greater stability and lower risk in extreme downturns, returns will tend to be lower than mid/small-cap, but far more predictable.	For the risk willing investor who wants to grow his money at a moderate risk or to create a strong base for long-term investing.
Flexi-Cap / Multi-Cap Funds	Funds able to pick stocks dynamically for large caps, mid caps, or small caps (flexible capitalization) or which have set allocations to these classes (multicap).	With greater exposure to mid and small caps, higher returns are potentially expected but they can also be more volatile. Flexicap allows a manager the flexibility in adjusting the allocations; multicap enforces diversity.
ELSS (Equity-Linked Savings Scheme)	Equity Tax Saving Funds (ELSS) are schemes offering tax benefits under Section 80C in India but come with a mandatory lock-in period (generally a minimum of 3 years).	Tax efficiency is added, good if one does not need full liquidity. Over a period of 10 years, the lock-in restrictions will not matter much.	Investors want tax deduction with equity exposure.
Hybrid Funds	Defensive in nature could be combinations of balanced, aggressive, or conservative portfolios.	Less volatile than pure equity; debt cushions equity shocks, but has less upside potential.	Consider if some stability is required or if you are half-way to your goal, or perhaps in a rebalancing exercise.
Index Funds / Passive Funds	Mutual funds that track indices such as Nifty 50, Nifty 100, etc.	These have lower fees; they stand transparent, capturing market returns. Passive funds often beat many actively managed funds over extended periods of time after fee deduction.	A category of businesses for those who feel the market broadly tends to rise, want low fees, and less hassle.

What Could ₹1 Lakh Become in 10 Years?

Assuming some annualised return rates as illustrations (not as predictions but as plausible scenarios, considering past data and probable future trends):

Annual Return	Final Value of ₹1,00,000 in 10 Years
6% (safe / hybrid / partly debt)	₹1,79,000
10% (large-cap/ conservative equity)	₹2,59,000
12%-14% (flexi-cap/ multi-cap/ good active equity)	₹3,10,000 - ₹3,70,000
15%-18% (strong mid/small-cap exposure, higher risk)	₹4,00,000 - ₹5,50,000

These are approximate calculations using compounding:

Final = ₹1,00,000 × (1 + r)^10.

So, if ₹1,00,000 were invested now and a return of ~12-14% were expected from a diversified flexi-cap fund, then one might expect about ₹3.2 to ₹3.7 lakh in 10 years. But it entails risk- volatility, occasional losses, etc.

Which Categories Might Be Best Mutual Fund for 10 Years

Looking forward, considering global and Indian economic trends (digital growth, consumption, regulatory shifts, inflation, interest rates, corporate governance), these funds shall be able to stand for a decade:

Large Cap + Flexi-Cap Style: A large cap provides the safety net to this style. If valuations turn favourable, flexi-cap shares can generate good growth from mid/small-cap stocks.

Large Cap Funds

Flexi Cap Funds

Funds like:

Nippon India Large Cap Fund
ICICI Prudential Large Cap Fund
DSP Large Cap Fund

have delivered strong returns over recent years.

HDFC Flexi Cap Fund
Canara Robeco Flexi Cap Fund

have shown very competitive 10-year and multi-year returns.

Index Funds: Keep part of one's portfolio in low-cost index funds (Nifty 50, Nifty 100) to benefit from broad market growth without ostensibly high fees or risk of wrong selection.
Selective Mid/Small Cap or Thematic Equity: For the smaller part (say 10 ± 20%), give it a go if you can bear the doubts. Areas like technology, renewable energy, consumer discretionary, etc., may realize higher growth but demand close watch.
Hybrid Funds to Lower Risk: For those seeking a smoother ride, hybrid or conservative hybrid funds may cushion the downside. Over a 10-year outlook, they may fail to beat pure equities but handily reduce drawdowns.
Tax Benefits from ELSS: Particularly useful in India, as you save on taxes while holding on to the investment over the long term. Post a few lock-in periods, you can re-invest. Funds like, Parag Parikh ELSS Tax Saver, Motilal Oswal ELSS Tax Saver etc. have shown good 3-5 year returns, which suggests potential if held for 10 years.

Risks & What Could Go Wrong

Market downturns: Deep falls can occur; panicking and exiting early might mean the loss of compound interest.
Fund underperformance: Past performance is not an indicator of the future. Some fund managers would be lagging behind their peers.
Inflation, change in policies, and taxes: High inflation or adverse tax or regulation changes can erode real returns.
Costs: High expense ratio, exit loads (if any), and taxes contribute to reducing net returns.

How Does My Mudra Help?

At My Mudra, we make sure you have all the knowledge when making such decisions, right from analysing the category, projecting realistic returns, and understanding what would fit your profile out of the top 10 mutual funds for long-term investment. With expert knowledge and tailored solutions, a future-focused investment journey will be intuitive and seamless; one that resonates with your goals, meaning very much to you.

Conclusion

Investing for 10 years is really the smartest way to multiply one's wealth through the best mutual fund for long-term investment in India. A 10-year time frame allows the investor to enjoy the magic of compounding, weather the volatility of markets, and grow true wealth. The best performing mutual funds for 10 years are those that not only give the highest 10 year returns mutual fund but also best fit your requirements and risk profile.

Also Read:
- Top 5 Mutual Funds That Doubled ₹10 Lakh in 4 Years
- Best Mutual Funds to Invest in India (2025)

Frequently Asked Questions

Why is 10 years regarded as the ideal time span for investing in mutual funds? +

With a 10-year time frame, investors can take advantage of the interest on interest concept, lower the effect of volatility, and gather better inflation-beating returns. It would be enough time for the equity market to go through one or two cycles and still reward wealth creation.

Is there any possibility that I invest in ELSS funds for 10 years for tax saving and wealth creation only? +

Yes, ELSS funds are great options for both tax saving and wealth creation, but nothing should be based solely on ELSS. Instead, one's portfolio should equally include flexi-cap, hybrid, and index funds so that it becomes well diversified.

What is the contribution of My Mudra to mutual fund investment for 10 years? +

My Mudra analyzes your goals, risk profile, and investment horizon to recommend the best fitting options among top mutual funds for long-term investment in India. With knowledge and expertise at its disposal, My Mudra ensures that you don't just chase those highest 10 year return mutual funds but instead invest in them smartly to grow steadily in the long term.

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Anjali Singh Assistant Manager

Hey there, I'm Anjali Singh. With over 6 years of experience in finance, I specialize in creating content on banking, loans, and financial planning. My goal is to simplify complex financial topics and help readers make informed decisions through my articles.