What are
Long Term Mutual
Funds?
When you remain invested in such mutual funds for 5 years or more, it becomes a long term investment scheme. These types of schemes make investments in asset classes that include:
Equities
Debentures
Either a
combination of both
Instead of worrying about daily market ups and downs, you stay invested and let your money grow over time.
Long term investing focuses on:
- Wealth creation
- Compounding growth
- Financial stability
- Goal-based planning
- Minimized effects of market fluctuations
The longer you are invested in the market, the greater your likelihood of profiting from market increases and capital gains.
Types of Long Term Investment
Mutual Funds in India
Investors have diverse objectives and risk profiles. The following types of long-term mutual funds are available in India.
Equity Mutual Funds
Equity mutual funds means invest primarily in equities/stocks of companies.
- High growth opportunities
- Wealth creation over time
- Moderate to aggressive investors
- Large Cap Mutual Funds
- Mid Cap Mutual Funds
- Small Cap Mutual Funds
- Flexi Cap Mutual Funds
- ELSS Mutual Funds for tax saving
Debt Mutual Funds
Debt mutual funds allocate their resources in fixed-interest-bearing securities.
- Cautious investors
- Regular income generation
- Low risk-taking attitude
- Short-duration debt funds
- Corporate bond funds
- Banking and PSU funds
- Dynamic bond funds
Hybrid Mutual Funds
Hybrid mutual funds invest in both equity and debt instruments.
- Balanced risk
- Sustainable growth
- Moderate investors
- Aggressive Hybrid Mutual Funds
- Balanced Advantage Mutual Funds
- Dynamic Asset Allocation Mutual Funds
- Multi Asset Allocation Mutual Funds
- Equity Savings Mutual Funds
- Arbitrage Mutual Funds
What are the Benefits of
Long-Term Investment Mutual Funds India?
Major Advantages of Investing in Long Term Mutual Funds are:
Compound Interest
- Over time, your money can grow as your returns start earning additional returns.
- Compounding becomes more effective as soon as you start.
- Your investment earns returns over time
- Those returns start generating additional returns
- Wealth grows faster when you stay invested longer
Professional Management
- Experts manage your investments, making long term mutual funds to invest in India easier to handle and you don't have to worry about it.
Experienced fund managers:
- Research markets
- Select investments
- Monitor risks
- Rebalance portfolios
This reduces the need for constant personal monitoring.
Flexible Investment Options
- SIPs and lump sum investments available
- Systematic Investment Plans (SIPs) / Recurring Orders allow investors to:
- Start with small amounts
- Invest regularly
- Reduce market timing risks
- Build financial discipline
Diversification
- Mutual funds spread investments across multiple:
- Companies
- Industries
- Asset classes
- This lowers concentration risk.
Less Impact from Market Fluctuations
- Up and down movements that occur in the short term lose importance with time when investments are held for a longer period.
Long-term investments are less influenced by temporary change because:
- Markets generally recover over time
- Long investment horizons reduce panic during corrections
- Short-term losses often balance out over the long run
Best Long Term
Mutual Funds to Invest in India
The right long term mutual funds to invest in India depends on your goals and risk level.
Equity
Mutual Funds
This type of fund is best for long term gains and is majorly invested in equities/stocks.
Key Features:
- Higher return potential compared to traditional savings options
- Invests across different sectors and companies
- Suitable for long-term financial goals
Index Funds
Funds that track indices such as Nifty or Sensex provide an easy and cost-effective choice.
Key Features:
- Lower expense ratios
- Simple and transparent investment approach
- Broad market exposure
- Suitable for long-term disciplined investing
Hybrid Funds
A Combination of equity and debt for balanced growth.
Key Features:
- Better diversification
- Reduced volatility compared to equity-only funds
- Combination of growth and stability
ELSS
(Tax Saving Funds)
These offer tax benefits along with long term investment potential.
Key Features:
- Tax benefits under applicable Indian tax laws
- Equity exposure for long-term growth
- Shortest lock-in among tax-saving options
- Suitable for disciplined long-term investing
Choose the fund category that aligns with your financial goals, investment horizon and risk appetite to build long-term wealth.
Mutual Funds and the Best
Long Term Investment Options
Here is a rough idea of what investors may expect from different types of long term mutual funds India over major timeframes/periods.
| Fund Type | Expected Annual Returns | Ideal Investment Horizon |
|---|---|---|
| Large Cap Mutual Funds | 10% – 15% | 5 – 10+ years |
| Mid Cap Mutual Funds | 12% – 16% | 7 – 10+ years |
| Small Cap Mutual Funds | 14% – 18%+ | 8 – 12+ years |
| Flexi Cap Mutual Funds | 11% – 15% | 5 – 10+ years |
| Index Funds | 10% – 13% | 5 – 10+ years |
| Hybrid Mutual Funds | 8% – 12% | 3 – 7 years |
| ELSS Tax Saving Funds | 10% – 15% | 3 – 10+ years |
| Debt Mutual Funds | 6% – 8% | 1 – 5 years |
These figures are indicative only. Depending on various factors such as market performance, economic trends, and interest rates, the actual returns will differ. Investing in a mutual fund scheme is subject to market fluctuations, and previous performance does not predict future gains.
SIP vs Lump Sum –
Which one is Better?
Both investment methods work differently.
Key Takeaway: SIPs are ideal for long-term wealth creation with discipline, while Lump Sum investments work well when you have surplus funds and good market opportunities.
How to Select the Right
Long Term Mutual Funds in India
Be clear about your financial goals –
Select your mutual fund investments depending on your objectives such as retirement, education, or wealth creation.
Know your level of risk –
Make your investments based on your tolerance for risk.
Analyze past performances –
See the fund's long term consistency and overall performance across market cycles.
Consider fees such as expense ratio –
Lower expense ratios can help improve overall returns over the long term.
Long Term Mutual Funds vs Traditional Savings
| Long Term Mutual Funds | Traditional Savings |
|---|---|
| Market linked growth potential | Fixed and lower returns |
| Better inflation beating potential | May struggle against inflation |
| Suitable for long-term wealth creation | Suitable for short-term safety |
| Professional fund management | No active investment management |
| SIP investing available | Limited growth flexibility |
Long-term mutual funds are generally preferred for future wealth creation, while savings accounts are mainly used for liquidity and emergency funds.
Investment in Indian
Long Term Mutual Funds
from New Zealand
For Indians living in New Zealand, investments in India are a challenging task. There is a lot of paperwork involved, banking formalities, exchange rate complications, and much more. This is where Icarus Wealth comes in to make the process easier.
Icarus Wealth is an FPI registered with SEBI and also listed on the Financial Service Providers Register (FSP1007238) of New Zealand. With that, eligible investors can invest in Indian mutual funds, including long-term mutual funds that India investors favor, via a more straightforward and seamless investment approach.
- Begin investments starting as low as NZD $100
- Invest in long-term mutual funds in India
- Transparency in NZD to INR exchange rate conversion
- No covert foreign exchange margins
- Manage your investments using one single dashboard
- Tap into the professional management of Indian mutual funds
- Benefit from the expertise in international investments and wealth management
Investing in the long term
works best when it is systematic.
Small Beginnings
That Lead to a Large Future
You don't need a large amount to begin.
You can start investing in long term mutual funds in India with a small amount and grow over time.
You can begin with a SIP (Systematic Investment Plan),
that will help you remain consistent in your investments.
👉 The minimum amount of money for each transaction we require is NZD 100, which makes it easy to get started.
Start small today,
and build a larger, brighter future tomorrow.
Start
Investing Today
Building wealth starts with one step.
With long term mutual funds in India, you can grow your money steadily over time.
At Icarus Wealth, we help you choose the right path based on your goals.
👉 Get in touch today and start your investment journey with confidence.
Frequently Asked Questions
Disclaimer:
Example funds are for illustration only. No recommendation is being made. Past performance is not indicative of future results. Investments carry risk. Investments in overseas markets, including India, involve additional risks such as currency fluctuations, regulatory differences, and tax implications.