Best Mutual Fund for SIPs: What Smart Investors Know That Most Don’t

The idea of a single “best” mutual fund for SIPs is misleading. Markets change, styles rotate and last year’s top fund may underperform tomorrow. True wealth comes from diversification, discipline and consistency.

Best Mutual Fund for SIPs: What Smart Investors Know That Most Don’t

Best Mutual Fund for SIPs: What Smart Investors Know That Most Don’t

Looking for the best mutual fund for your SIP in 2025?

You’re not alone. This remains one of the most searched investment queries in India today, and it makes sense after all, who doesn’t want to invest in the best? To answer this, let’s break the question into two parts.

Which Is the Best Fund?

When people search for the best mutual fund, they often mean different things. For some, it’s the fund that delivered the highest return in the past year. For others, it’s one with stable returns over the past five years, meaning lower volatility. Some investors want a fund that carries less risk but still delivers strong returns.

The definition of “best” varies widely. If “best” doesn’t mean the same for everyone, how can one single fund be considered the best for all investors?

Is There Really a Best Fund?

Most websites list “top funds” based solely on recent performance. Many DIY investors follow this approach, which often leads to short-term investing. They look at the past one-year return, invest, and then exit when results don’t match expectations. This is why roughly half of SIPs stop within a year.

The truth: there is no single best mutual fund. Not for SIPs. Not for anyone. Not forever.

Past performance is not a guarantee of future returns, yet it remains useful. It shows how a fund behaved in strong markets and how it managed during downturns. Looking at performance is not wrong, but relying only on last year’s numbers is not ideal.

What Markets Tell Us

Market cycles prove why chasing the “best” fund is a flawed strategy:

● In 2020-21, large-cap funds dominated.

● In 2022, value-oriented and dividend funds led the way.

● In 2023-24, mid- and small-cap funds and thematic funds delivered massive gains, only to face sharp corrections in 2025.

The various investment styles embraced by mutual funds are not alike, and each of the styles achieves different results based on the stage of the market. A small-cap fund might deliver stellar returns in a bull market but crash when the market turns volatile. A large-cap fund might offer stability, but underperform during a rally in smaller stocks. Value funds might lag for years before having a sudden burst of outperformance.

If one follows only the BEST fund strategy, they would have missed not only good returns but also compounding. What works today may underperform tomorrow. Chasing past performance can be a trap.

Search for “top mutual funds for SIP,” and you’ll see a new list every year. That’s because:

● Market trends shift

● Fund managers change

● Economic cycles play out

The ’No.1 Fund’ of last year may not even feature in this year’s top ten.

The Right Question to Ask

Instead of asking “What is the best mutual fund for SIP in India right now?”, one should ask “Which mutual fund mix matches my goals, time horizon, and risk appetite?”

What Seasoned Investors Do

Here’s what seasoned investors do:

1. Choose 4 - 5 quality funds with different investment styles

2. Invest monthly, no matter what the market is doing

3. Rebalance the portfolio once a year, independent of when the “best fund” list is released

4. Focus on financial goals rather than short-term fund returns

Conclusion

There is no single best mutual fund for SIPs, only the best combination for you. Instead of chasing last year’s star performer, build a well-diversified portfolio, invest consistently, and let time do its work.

Wealth is not built by chasing returns. It is built by staying the course.

Disclaimer: Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.