Over the past 10 years, a very few 5-star rated mutual funds rewarded that patience shown by investors by delivering more than 21% annualised SIP (systematic investment plan) returns. What’s interesting is that these funds did not achieve this by simply riding the market rally. They managed to outperform broader benchmarks over a full market cycle that included bull runs and corrections.
For long-term investors, this offers an important reminder that wealth creation is often less about timing the market and more about staying invested in quality funds for long periods.
Among the standout performers were three funds from different investment styles.
The first, Edelweiss Mid Cap Fund, emerged as the top performer on a 10-year SIP basis. This fund benefited from its exposure to high-growth mid-sized companies across sectors such as financials, industrials, and healthcare.
The second was ICICI Prudential Infrastructure Fund, which rode India’s infrastructure and capital expenditure story to generate strong returns.
The third spot went to Nippon India Growth Mid Cap Fund, another mid-cap-focused scheme that delivered impressive wealth creation through a diversified portfolio of emerging businesses.
A closer look at these three schemes reveals not only how they generated market-beating returns but also the risks investors had to endure along the way.
While the numbers are impressive, understanding their investment strategy, portfolio composition, and risk profile is equally important before considering them for a long-term SIP portfolio.
Top 3 equity mutual funds based on 10-year returns
Here are the top three direct equity mutual funds that generated over 21% SIP returns over the last 10 years:
| Fund | 10-year SIP return (%) | Rs 10,000 SIP turns into |
| Edelweiss Mid Cap | 21.72 | Rs 37,97,516 |
| ICICI Pru Infrastructure | 21.44 | Rs 37,35,163 |
| Nippon India Growth Mid Cap | 21.16 | Rs 36,84,582 |
| Source: Value Research |
Edelweiss Mid Cap Fund
Edelweiss Mid Cap Fund tops the list with a 10-year SIP return of 21.72% and a relatively low expense ratio of 0.48%.
The fund’s portfolio is primarily exposed to financials, industrials, consumer discretionary, materials and healthcare. Its top holdings include MCX, Federal Bank, BSE, AU Small Finance Bank and Marico.
The fund is classified as very high risk. However, its alpha of 4.16 suggests that the fund manager has consistently generated returns above its benchmark on a risk-adjusted basis. Its beta of 0.95 indicates that the fund has been slightly less volatile than the broader market.
The standard deviation of 17.88 points indicates moderate volatility, though investors should remember that mid-cap funds can witness sharp swings during market downturns.
The scheme may be suitable for investors seeking higher long-term growth potential and who are comfortable with moderate-to-high risk. Given its focus on mid-cap stocks, it is best suited for investors with an investment horizon of at least five to seven years.
ICICI Prudential Infrastructure Fund
ICICI Prudential Infrastructure Fund Direct Growth ranks second with a 10-year SIP return of 21.44%. However, its expense ratio of 1.59% makes it one of the costlier options in the thematic fund category.
Given its very high-risk profile, the fund may be suitable for investors with an investment horizon of at least seven years. It primarily invests in companies linked to infrastructure and allied sectors.
The fund’s key sector exposures include industrials, energy and utilities, materials, financials and real estate. Its top holdings include InterGlobe Aviation, L&T, Oberoi Realty, NTPC and Brigade Enterprises.
Its standard deviation of 17.82% is significantly lower than the benchmark’s 25.61%, indicating comparatively lower volatility. The Sharpe ratio of 0.97, marginally higher than the benchmark’s 0.93, suggests better risk-adjusted returns.
Similarly, the Sortino ratio of 1.58 reflects decent downside risk-adjusted performance. The alpha of 2.32 indicates that the fund manager generated returns above the benchmark on a risk-adjusted basis.
Over the long term, the fund has outperformed its benchmark, BSE India Infrastructure TRI, delivering trailing returns of 25.19% over five years and 19.02% over 10 years.
The fund is managed by Ihab Dalwai.
Nippon India Growth Mid Cap Fund
Nippon India Growth Mid Cap Direct Growth ranks third, with a 10-year SIP return of 21.16%.
Its portfolio is diversified across sectors such as financial services, industrials, healthcare, technology, energy and utilities. Key holdings include BSE, Fortis Healthcare, Federal Bank, AU Small Finance Bank and Bharat Forge.
The fund carries a high-risk profile and may suit investors seeking focused exposure to the mid-cap segment and willing to stay invested for the long term. A minimum investment horizon of five to seven years is generally recommended.
The scheme has outperformed its benchmark, BSE 150 MidCap TRI, by delivering trailing returns of 11.28% in one year, 25.56% in three years, 22.48% in five years, 22.28% in seven years and 19.86% in 10 years.
The fund’s expense ratio of 1.54% is on the higher side compared to many peers.
The fund is managed by Rupesh Patel.
A word of caution
While these mutual funds have delivered impressive SIP returns over the past decade, investors should remember that past performance does not guarantee future returns. Mid-cap and infrastructure-focused funds can witness sharp volatility during market downturns.
Thematic funds such as infrastructure schemes are also dependent on sector-specific growth trends and policy support, making them riskier than diversified equity funds.
Additionally, higher expense ratios can affect long-term returns if performance slows down. Investors should therefore align their SIP investments with their risk appetite, financial goals and investment horizon rather than chase past returns alone.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
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