If you’re planning to invest for 5 to 10 years or more, choosing the right mutual fund is very important. Many investors want to know, which mutual fund is best for long term SIP?
In this article, we’ll explore the answer with a special focus on the HDFC Flexi Cap Fund, one of India’s top-performing funds in 2025.
Why Choose SIP for Long-Term Investment?
A Systematic Investment Plan (SIP) helps you invest a small fixed amount every month. Over the long term, this builds wealth through compounding. SIPs reduce risk by averaging the cost of buying mutual fund units, even when markets go up and down.
Factors to Consider Before Choosing a Mutual Fund
- Fund’s past 3–5 years performance
- Consistency of returns across market cycles
- Experienced fund manager
- Expense ratio and risk level
- Portfolio diversification
Why HDFC Flexi Cap Fund is Best for Long Term SIP
The HDFC Flexi Cap Fund has been a solid performer in 2024 and 2025, delivering around 22% annual return. It invests across large, mid, and small-cap stocks — giving investors the benefit of growth with stability. This makes it ideal for long-term wealth creation through SIP.
Key Highlights of HDFC Flexi Cap Fund
- Category: Flexi Cap Fund
- Launch Date: January 1995
- Fund Manager: Prashant Jain (one of India’s top fund managers)
- 3-Year Return: ~22% p.a.
- Benchmark: NIFTY 500 TRI
- Expense Ratio: 1.10% (Direct Plan)
Portfolio and Investment Strategy
The fund invests in a mix of large-cap stocks like HDFC Bank, Reliance, and ICICI Bank, along with mid-cap opportunities in manufacturing, finance, and IT sectors.
The manager follows a bottom-up approach, selecting stocks with strong fundamentals and long-term potential.
Performance Comparison
According to latest data, HDFC Flexi Cap Fund has outperformed most of its peers. Here’s how it compares:
| Fund Name | 3-Year Return (p.a.) | Category Rank |
|---|---|---|
| HDFC Flexi Cap Fund | 22.1% | Top 10% |
| Parag Parikh Flexi Cap Fund | 18.7% | Top 25% |
| UTI Flexi Cap Fund | 17.5% | Top 30% |
How Long Should You Stay Invested?
Ideally, investors should stay invested for at least 5 to 10 years. The longer you stay, the better the compounding works. Even small SIPs like ₹1,000 per month can grow into lakhs over time if continued regularly.
Example: SIP Growth in HDFC Flexi Cap Fund
If you invest ₹5,000 monthly in HDFC Flexi Cap Fund for 10 years at 12% annual return, you’ll get around ₹11.6 lakh on a total investment of ₹6 lakh. That’s the power of long-term SIP and compounding.
Risk and Return Analysis
- Risk Level: Moderately High
- Return Potential: High (suitable for long-term investors)
- Best For: Investors with 5+ years horizon
- Taxation: Long Term Capital Gains (LTCG) tax after 1 year
Expert Opinion on HDFC Flexi Cap Fund
Experts say that the HDFC Flexi Cap Fund continues to be a strong choice for investors seeking long-term capital appreciation. It has managed to beat 90% of its peers in 2025 despite market volatility.
Comparison with FD and SWP Options
If you are confused between SIP, FD, or SWP, check this article: SWP vs FD – Which One is Best for Creating Wealth. You’ll understand how SIP gives higher growth than traditional savings.
Investor Tips
- Start early to get maximum compounding benefit.
- Stay invested through market ups and downs.
- Increase SIP amount every year (Step-up SIP).
- Review fund performance once a year.
- Continue SIP even during market correction.
Pros and Cons of HDFC Flexi Cap Fund
| Pros | Cons |
|---|---|
| Consistent long-term returns. | Moderate short-term volatility. |
| Experienced fund manager. | Higher exposure to equity risk. |
| Diversified across sectors. | Not ideal for short-term goals. |
Summary
For long-term SIP investors, HDFC Flexi Cap Fund stands out as one of the best mutual funds in 2025. Its solid track record, experienced management, and balanced portfolio make it ideal for those who want to create wealth steadily over time.
FAQs – Best Mutual Fund for Long Term SIP
1. Which mutual fund is best for long-term SIP?
HDFC Flexi Cap Fund is one of the best options because of its strong performance and experienced fund manager.
2. How long should I continue SIP?
At least 5–10 years for better compounding and to reduce market volatility impact.
3. Can I start SIP with ₹500 per month?
Yes, most mutual funds including HDFC Flexi Cap allow SIPs starting at ₹500 per month.
4. Is HDFC Flexi Cap Fund risky?
It carries moderate risk since it invests in equities, but the long-term returns are rewarding.
5. How to invest in HDFC Flexi Cap Fund?
You can invest through HDFC Mutual Fund website, apps like Groww, or your bank’s investment platform.
6. Can I stop SIP anytime?
Yes, SIPs are flexible. You can pause, increase, or stop anytime without penalty.
7. What returns can I expect in 10 years?
Based on past performance, around 12–15% annual return is possible over the long term.
Tip: Always invest for long-term goals like retirement, home, or children’s education — not short-term profits.
Author: Masroor Alam | Published on October 20, 2025
