Best Long-Term Mutual Funds in India
Long-term investment involves holding assets for years or decades. This strategy leverages compounding for substantial returns, helps investors weather market volatility, and provides stability against short-term fluctuations. For those aiming to accumulate wealth over the long term, mutual funds offer consistent, steady growth. This article will explore the top mutual funds for long-term investment in 2025, provide fund overviews, and offer guidance on investing in these options.
Top 10 Long Term Mutual Funds in 2026
The following is an educational list of the best mutual funds for long-term investment, based on their 3-yr, 5-yr, and 10-yr CAGR:
| Fund Name | Category | Fund Size (Rs. in Cr) | 3Y CAGR (%) | 5Y CAGR (%) | 10Y CAGR (%) | Expense Ratio (%) |
|---|---|---|---|---|---|---|
| DSP World Gold Mining Overseas Equity Omni FoF | FoFs - Gold | 1,756.31 | 52.40 | 27.95 | 22.70 | 1.7 |
| LIC MF Gold ETF FoF | FoFs - Gold | 623.38 | 41.22 | 26.55 | 18.29 | 0.32 |
| Aditya Birla SL Gold Fund | FoFs - Gold | 1,265.71 | 40.64 | 26.07 | 18.74 | 0.2 |
| Nippon India Gold Savings Fund | FoFs - Gold | 5,301.24 | 40.44 | 25.87 | 18.66 | 0.13 |
| ICICI Pru Gold ETF FOF | FoFs - Gold | 4,481.52 | 40.32 | 25.93 | 18.61 | 0.09 |
| SBI Gold | FoFs - Gold | 10,774.96 | 39.77 | 25.58 | 18.63 | 0.1 |
| HDFC Gold ETF FoF | FoFs - Gold | 8,501.18 | 39.36 | 25.38 | 18.51 | 0.18 |
| Quantum Gold Saving Fund | FoFs - Gold | 357.10 | 39.21 | 25.18 | 18.26 | 0.04 |
| Invesco India Gold ETF FoF | FoFs - Gold | 340.85 | 38.89 | 24.83 | 20.46 | 0.1 |
| Axis Gold Fund | FoFs - Gold | 2,166.98 | 38.25 | 24.79 | 18.19 | 0.17 |
Note: The data on the list is from 13th May, 2026. This data is derived from the Tickertape Mutual Fund Screener.
- Plan: Growth
- 3Y CAGR: Sorted from Highest to Lowest
- 5Y CAGR: Positive (Set lower limit to 0)
- 10Y CAGR: Positive (Set lower limit to 0)
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Best Long Term Mutual Funds
Aditya Birla SL PSU Equity Fund
This fund invests mainly in public sector undertakings across sectors such as banking, energy, utilities, and industrials. Its performance depends on trends in the PSU sector, government policy, capital expenditure, and earnings growth.
LIC MF Infra Fund
LIC MF Infra Fund focuses on companies linked to infrastructure development, including construction, power, capital goods, transport, and allied sectors. Its returns can depend on project execution, policy support, and economic cycles.
DSP India T.I.G.E.R Fund
DSP India T.I.G.E.R Fund invests in themes related to infrastructure, economic reforms, and growth. It covers sectors such as capital goods, construction, utilities, industrials, and logistics, making it a thematic equity fund.
SBI PSU Fund
SBI PSU Fund invests in listed public sector companies across industries such as banking, energy, defence, utilities, and metals. The fund’s performance may vary with PSU valuations, reforms, and sector-specific developments.
ICICI Pru Infrastructure Fund
ICICI Pru Infrastructure Fund invests in companies linked to infrastructure and allied sectors. Its portfolio may include power, construction, capital goods, telecom, cement, and transport-related businesses.
Nippon India Power & Infra Fund
Nippon India Power & Infra Fund focuses on power, energy, infrastructure, and related companies. Its performance depends on electricity demand, policy changes, project pipelines, and broader infrastructure investment trends.
Canara Rob Infrastructure Fund
Canara Robeco Infrastructure Fund invests in companies that benefit from infrastructure creation, including capital goods, construction, power, cement, and industrial businesses. It carries thematic equity exposure.
Invesco India PSU Equity Fund
Invesco India PSU Equity Fund invests mainly in public sector enterprises. It provides exposure to PSU-led sectors such as banks, energy, defence, utilities, and industrials, depending on portfolio composition.
Bandhan Small Cap Fund
Bandhan Small Cap Fund invests mainly in small-cap companies across sectors. These companies may offer higher growth potential, but they can also carry higher volatility and liquidity risk.
Franklin Build India Fund
Franklin Build India Fund invests in companies linked to India’s infrastructure and economic development. Its portfolio may include construction, capital goods, financials, utilities, and industrial-related businesses.
How to Invest in Mutual Funds for the Long Term?
You can easily invest in mutual funds for the long term by following these steps:
- To invest in mutual funds for the long term, you can visit an equity investment platform such as smallcase or Tickertape.
- The next step would be to research and identify the top mutual funds to invest for long term that align with your investment thesis. You can easily select and learn more about these mutual funds to invest for long term with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance and allows users to compare SBI MF mutual funds.
- Once you have selected the long term mutual funds to invest based on different metrics and parameters, go to smallcase.com or the smallcase app, and login via your phone number. Click on ‘Discover‘ and enter the name of the specific mutual fund name in the search bar and hit enter. To start the long term mutual funds SIP, you can click on ‘invest now’ and select whether you want to invest a lump sum amount or start an SIP and start investing!
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade model portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered investment experts (also known as smallcase managers)
- smallcase offers over 500+ stock portfolios, created by 200+ managers
Here are a few popular smallcases among new investors:
Disclosures for aforementioned smallcases
What are Long Term Mutual Funds?
Long-term mutual funds are schemes held for an extended period, typically 3 to 5 years or more. They can include equity funds, index funds, hybrid funds, ELSS funds, or other schemes suited to longer financial goals. These funds remain market-linked, so returns can fluctuate in the short term. A longer holding period may help reduce the impact of short-term volatility, depending on the fund category, market cycle, and portfolio quality.
Taxation on the Best Mutual Funds for Long-Term Growth as per the Union Budget 2026-27
| Mutual Fund Type | Short-Term Capital Gains (STCG) | Long-Term Capital Gains (LTCG) | Holding Period |
| Equity Mutual Funds | 20% tax on gains | 12.5% tax on gains above ₹1.25 lakh in a financial year | STCG below 12 months, LTCG above 12 months |
| ELSS Mutual Funds | 20% tax on gains | 12.5% tax on gains above ₹1.25 lakh in a financial year | STCG below 12 months, LTCG above 12 months |
| Debt Mutual Funds | Taxed as per the investor’s income tax slab | Taxed as per the investor’s income tax slab | Applicable regardless of holding period |
| Hybrid Mutual Funds (Equity-Oriented) | 20% tax on gains | 12.5% tax on gains above ₹1.25 lakh in a financial year | STCG below 12 months, LTCG above 12 months |
| Hybrid Mutual Funds (Debt-Oriented) | Taxed as per the investor’s income tax slab | Taxed as per the investor’s income tax slab | Applicable regardless of holding period |
| Gold Mutual Funds / International Funds | Taxed as per the investor’s income tax slab | Taxed as per the investor’s income tax slab | Applicable regardless of holding period |
| Dividend Income | Taxed as per the investor’s income tax slab | Not applicable | Not applicable |
Features of the Best Mutual Fund For the Long Term
- Long-Term Wealth Creation Focus: Long-term mutual funds usually invest across equity, hybrid, or diversified portfolios with the objective of participating in long-term economic and market growth.
- Compounding Potential: Staying invested for longer periods allows returns to compound, which can influence overall portfolio growth across market cycles.
- Diversified Portfolio Structure: Many long-term mutual funds invest across sectors, companies, and market capitalisations, helping reduce concentration towards a single stock or sector.
- SIP Compatibility: Long-term mutual funds commonly support SIP investing. SIP inflows in India remained above ₹30,000 cr per month during 2026, reflecting continued investor participation.
- Wide Category Availability: Investors can access long-term mutual funds across categories such as flexi-cap, large-cap, index, hybrid, ELSS, mid-cap, and small-cap funds.
- Large and Growing Mutual Fund Industry: India’s mutual fund industry AUM crossed ₹81 lakh cr in 2026, reflecting rising participation in market-linked investment products.
Advantages of Investing in the Best Mutual Fund For Long Term
- Participation in Economic Growth: Long-term mutual funds provide exposure to businesses and sectors linked to India’s economic expansion and capital market growth.
- Potential Benefit from Compounding: Reinvested returns over longer periods may increase portfolio value through compounding, especially during sustained market growth phases.
- Ability to Navigate Market Cycles: Long investment horizons may reduce the impact of short-term market volatility compared to short-duration investing approaches.
- Professional Fund Management: Mutual funds are managed by professional fund managers who monitor portfolio allocation, risk, liquidity, and sector exposure.
- Accessibility Through SIPs: SIP investing allows gradual market participation over time rather than relying on a single entry point.
- Growing Investor Participation: India’s mutual fund industry has grown more than six times over the last decade, supported by rising retail participation and digital investing platforms.
Risks of Investing in the Best Mutual Fund to Invest in Long Term
- Market Volatility Risk: Equity mutual funds remain exposed to market fluctuations. Portfolio values can decline during market corrections, economic slowdowns, or periods of global uncertainty.
- Category-Specific Risk: Mid-cap, small-cap, thematic, or sectoral funds can experience greater volatility than diversified large-cap funds.
- No Guaranteed Returns: Mutual funds are market-linked products, so returns depend on market conditions, fund strategy, sector performance, and portfolio allocation.
- Interest Rate and Credit Risk: Debt-oriented long-term funds may face risks related to interest rate changes, liquidity conditions, and credit quality.
- Sector Concentration Risk: Some funds may hold high exposure towards sectors such as banking, technology, infrastructure, or energy, increasing sector-specific sensitivity.
- Behavioural Risk: Short-term market volatility can lead to panic redemptions or emotional investment decisions despite long-term investment goals.
Factors to Consider When Choosing Long-Term Mutual Funds
- Investment Objective: Investors may review whether the fund aligns with goals such as long-term growth, income generation, tax savings, or diversification.
- Fund Category: Risk and return profiles differ across large-cap, flexi-cap, index, hybrid, mid-cap, small-cap, and debt mutual funds.
- Historical Performance Across Cycles: Reviewing performance across bull and bear market phases may provide better context than short-term return comparison alone.
- Expense Ratio: Expense ratios affect the cost of mutual funds for long-term investment. Passive funds generally have lower expense ratios than actively managed funds.
- Portfolio Diversification: Sector allocation, market-cap exposure, and stock concentration can influence fund behaviour during market cycles.
- Fund Manager and Investment Strategy: Active funds may differ in portfolio construction, sector allocation, and the investment approach followed by the fund manager.
- Risk Profile and Investment Horizon: Long-term equity mutual funds can be volatile in the short term, making risk tolerance and investment horizon important considerations.
Who Can Consider Investing in Mutual Funds for the Long Term?
- Long-Term Goal Investors: Investors planning for goals such as retirement, children’s education, or long-duration wealth creation often explore long-term mutual funds.
- SIP-Based Investors: Investors who prefer regular, gradual investing through SIPs may consider long-term mutual fund investing.
- Equity Market Participants: Investors seeking market-linked exposure through diversified portfolios rather than direct stock selection may consider mutual funds.
- Passive Investment Participants: Investors interested in index funds and passive investing for long-term allocation may also consider long-term mutual fund strategies.
- Diversification Seekers: Mutual funds can provide diversified exposure across sectors, companies, and asset classes through a single scheme.
- Investors with Higher Risk Capacity: Equity-oriented long-term mutual funds may suit investors who can tolerate short-term market fluctuations.
To Wrap It Up…
In conclusion, long-term mutual funds offer an effective strategy for investors with specific long-term financial goals and risk appetites. Their potential for higher returns, coupled with the power of compounding, makes them an attractive choice for those willing to commit to the long term. However, aligning these funds with your financial objectives and carefully assessing your risk tolerance is crucial. Whether you’re planning for retirement, your child’s education, or simply looking to harness the benefits of compounding, long-term mutual funds may be a valuable addition to your investment portfolio. However, it is always recommended for investors to consult a financial advisor and conduct thorough research before investing.
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Frequently Asked Questions (FAQs) on Long Term Mutual Funds
Investors often review equity, index, flexi-cap, and hybrid funds when comparing mutual funds for long-term investment. The choice depends on risk profile, time horizon, asset allocation, and financial goals.
Disclaimer: This is not investment advice. Mutual fund investments are subject to market risks.
Long-term mutual funds are taxed based on fund category. Equity funds held for over 12 months attract 12.5% LTCG tax on gains above ₹1.25 lakh, while STCG is taxed at 20%. This taxation can affect the best mutual funds’ next 10-year analysis.
Investors can usually sell open-ended mutual funds at any time. However, exit load, lock-in rules, and tax treatment may vary by scheme. This also applies to mutual funds for long-term investment.
No, long-term mutual funds are not risk-free. Equity, debt, hybrid, and small-cap funds can face market, interest rate, credit, and liquidity risks. Even the best small-cap mutual funds for the long term can remain volatile.
Disclaimer: Risk levels vary across mutual fund categories. Past performance does not guarantee future returns.
Here are the top long-term mutual funds based on their 3, 5 and 10-year CAGRs:
– DSP World Gold Mining Overseas Equity Omni FoF
– LIC MF Gold ETF FoF
– Aditya Birla SL Gold Fund
– Nippon India Gold Savings Fund
– ICICI Pru Gold ETF FOF
Disclaimer: The data for this list of top 5 mutual funds for the long term is as of 13th May, 2026.
Investors usually compare performance over 5 to 10 years, expense ratios, fund manager track records, risk-adjusted returns, portfolio quality, and category consistency when building the best mutual fund portfolio for the long term.
