Starting a Systematic Investment Plan (SIP) is one of the best strategies for long-term wealth creation. Regardless if you’re a novice or an experienced investor, SIPs allow you to invest regularly, while taking advantage of price fluctuations via rupee cost averaging. As we head into 2025, here are five mutual funds you may consider for SIPs, based on their performance, consistency, fund management, and growth potential.
1. HDFC Flexi Cap Fund
- Type: Flexi Cap (invests across large, mid, and small caps)
- Why It’s a Top Pick: Flexibility is a positive as the fund manager can choose to invest wherever they see an opportunity, and hence, is capable of creating a sustainable portfolio. Through consistent good returns from the underlying equities, this fund has proven to be successful and made easier with good research.
- Who is it Good For: It is suited for risk seekers who do not want to take too much risk but still want a combination of stability and growth.
2. ICICI Prudential Infrastructure Fund
- Category: Sectoral (Infrastructure)
- Why it’s a Top Pick: With the increasing push toward infrastructure development in India (smart cities, roads, railways, green energy, etc.), this fund stands to gain. Infrastructure development has been shown to drive the economy out of cyclical contractions and the performance is solid during infrastructure-led economic recoveries.
- Ideal for: Aggressive investors want to capitalize on India’s infrastructure growth story.
3. Mirae Asset Large Cap Fund
- Category: Large Capitalization
- Why it’s a Top Pick: It invests in India’s 100 largest companies by market capitalization. The reliability of returns and the stability of the largest companies is popular with conservative investors.
- Ideal for: First-time investors or investors who prefer blue-chip investment outcomes with lower risk.
Also read: Top 5 Flexi Cap Mutual Funds for 2025 – Is Your Fund on the List?
4. Kotak Emerging Equity Fund
- Category: Medium Capitalization
- Why it’s a Top Pick: This fund covers mid-sized companies that will become the larger leading companies of tomorrow. The fund has consistently outperformed its benchmark over long investment horizons.
- Ideal for: Investors who are willing to take moderate risk for potentially greater returns.
5. Bandhan Small Cap Fund
- Type: Small Cap
- Reason for Selection: In a bullish market, small-cap funds can provide phenomenal returns. Bandhan Small Cap Fund has performed well historically and takes a quality-first approach to its portfolio.
- Good For: Long-term investors willing to tolerate short-term volatility, Uber-high growth.
Things to Keep in Mind Before Investing
- Long-term focus: SIPs work best with an investment horizon of at least 5–7 years. Patience is rewarded.
- Risk comfort: Choose funds based on your own comfort with stock market risk and volatility.
- Diversification: Avoid going all-in on any one category. Mix large, mid, and small caps for a well-diversified portfolio.
- Ongoing Management: Review your portfolio once or twice a year, and only make changes based on either a change in underlying performance (best) or change in your investment goals (okay).
Final Thoughts
SIP investing is a simple but powerful vehicle for achieving financial freedom. By establishing an appropriate mix of mutual funds that are aligned with either your own risk appetite and/or goals, you can steadily grow your money over time. Remember, the past performance is not a guarantee of the returns you avail in the future. Always do your own research or consult with a certified financial advisor before investing in the market.
Written by Pranjal Data
