High returns grab headlines. Consistency builds wealth.
A fund delivering 40% one year and -15% the next sounds exciting. But a fund delivering steady 16-18% year after year will make you richer over time. The math is simple: recovering from losses takes more than matching gains.
At Belong, we speak with NRIs daily who chased last year's top performer only to watch their portfolio swing wildly. This guide helps you identify funds that deliver reliable returns across bull and bear markets.
What Makes a Mutual Fund "Consistent"?
Consistency is not about identical returns every year. Markets move. So do fund returns. Consistency means the fund:
- Outperforms its benchmark more often than not
- Falls less during market crashes
- Recovers faster after corrections
- Delivers steady risk-adjusted returns over 5-10 year periods
A June 2025 analysis by MyReality.co.in found that only a handful of funds beat their 5-year benchmark returns in at least 5 out of 7 financial years. Most funds are inconsistent, which makes identifying the truly reliable ones valuable.
👉 Tip: Never judge consistency by one year's returns. Look at 3, 5, and 10-year performance across different market conditions.
How to Measure Consistency: Key Metrics
Rolling Returns
Rolling returns measure performance over multiple overlapping periods rather than point-to-point returns. For example, a 3-year rolling return calculates every possible 3-year period over a fund's history.
Why it matters: A fund with 18% point-to-point return might have actually delivered anywhere from 8% to 28% in different 3-year windows. Rolling returns reveal this variation.
What to look for:
- Average rolling returns above category average
- Narrow range between best and worst rolling periods
- Positive returns in most rolling periods
Standard Deviation
Standard deviation measures how much a fund's returns deviate from its average. Lower standard deviation means more predictable returns.
Standard Deviation | Interpretation |
|---|---|
Below 12% | Low volatility, steady returns |
12-18% | Moderate volatility |
Above 18% | High volatility, unpredictable |
Example: If a fund has 15% average return and 10% standard deviation, its annual returns typically range between 5% and 25%. A fund with 15% average but 20% standard deviation might swing between -5% and 35%.
Sharpe Ratio
The Sharpe ratio measures return per unit of risk. It tells you how much extra return you earn for the volatility you endure.
Sharpe Ratio | Quality |
|---|---|
Below 0.5 | Poor risk-adjusted returns |
0.5-1.0 | Decent |
1.0-2.0 | Good |
Above 2.0 | Excellent |
According to Smart Investing India, investors should prioritize funds with Sharpe ratios consistently above 0.75-1.0 in their category over 3-5 year periods.
Sortino Ratio
The Sortino ratio is like Sharpe but only considers downside volatility. It ignores positive price movements (which are good for you) and focuses on harmful losses.
A Sortino ratio above 1.2 indicates strong downside protection, making it ideal for risk-averse investors approaching retirement.
👉 Tip: Use Belong's Compliance Compass alongside your investment analysis to ensure you stay compliant with all NRI regulations.
Alpha
Alpha measures how much a fund outperformed (or underperformed) its expected return based on market risk. Positive alpha means the fund manager added value beyond market movements.
What to look for: Consistent positive alpha of 2% or higher over 5+ years indicates skilled management.
Downside Capture Ratio
This ratio measures how much the fund falls when its benchmark falls. A downside capture ratio of 80% means when the benchmark drops 10%, the fund drops only 8%.
Lower downside capture = better protection during crashes.
Most Consistent Mutual Funds by Category
Flexi Cap Funds: The Consistency Champions
Flexi cap funds invest across large, mid, and small caps without restrictions. The best managers use this flexibility to navigate market cycles effectively.
Fund Name | 5-Year CAGR | 10-Year CAGR | Sharpe Ratio | Standard Deviation | Consistency Score |
|---|---|---|---|---|---|
Parag Parikh Flexi Cap | 21.1% | 18.4% | 0.53 | 13.8% | Beat benchmark 6/7 years |
JM Flexicap Fund | 25.6% | 17.2% | 0.62 | 15.1% | Beat benchmark 6/7 years |
Quant Flexi Cap Fund | 27.3% | N/A | 0.48 | 17.9% | Beat benchmark 6/7 years |
HDFC Flexi Cap Fund | 25.5% | 17.6% | 0.55 | 14.2% | Consistent across cycles |
Kotak Flexicap Fund | 19.3% | 15.8% | 0.51 | 13.5% | Lower volatility |
Data as of December 2025. Source: Value Research, Equitymaster, Groww
Standout: Parag Parikh Flexi Cap Fund
This fund has become India's largest flexi cap scheme with AUM exceeding ₹1.25 lakh crore. What makes it consistent?
- Value investing philosophy: Only buys quality businesses at reasonable valuations
- International diversification: Up to 35% in US stocks (Alphabet, Amazon, Meta) provides rupee depreciation protection
- Low portfolio turnover: Holds stocks for years, reducing transaction costs
- Disciplined approach: Doesn't chase momentum or market trends
The fund's 10-year CAGR of 18.4% with a standard deviation of 13.8% demonstrates strong risk-adjusted performance. Its PE ratio of 18.61 (versus category average of 28.81) shows the value focus.
For NRIs: The international exposure makes this fund particularly attractive. When the rupee weakens, your dollar-denominated US holdings gain value, partially offsetting currency losses.
Large Cap Funds: Stability Focused
Large cap funds invest in India's top 100 companies. They offer lower growth but more predictable returns.
Fund Name | 5-Year CAGR | 10-Year CAGR | Sharpe Ratio | SD | Benchmark Beat |
|---|---|---|---|---|---|
Canara Robeco Bluechip | 16.5% | 14.8% | 0.12 | 11.9% | 5/7 years |
Nippon India Large Cap | 21.8% | 16.2% | 0.48 | 13.2% | Consistent |
ICICI Prudential Bluechip | 18.8% | 15.1% | 0.42 | 12.8% | Consistent |
Mirae Asset Large Cap | 17.5% | 14.6% | 0.38 | 12.5% | Consistent |
Data as of December 2025. Source: Tickertape, INDmoney
Standout: Canara Robeco Bluechip Fund
According to the MyReality analysis, this is the most consistent alpha-generating large cap fund, beating its 5-year benchmark returns in 5 out of 7 financial years. Only Axis Bluechip managed to match this consistency with 4 out of 7 years.
Key characteristics:
- Standard deviation of just 11.87% (among the lowest in category)
- Alpha of 7.02 (exceptional outperformance)
- Expense ratio of just 0.46% (Direct plan)
- 59 stocks with 96% in large caps
The fund follows a blend style, seeking growth stocks at fair valuations rather than chasing momentum.
👉 Tip: Large cap funds work well as the stable core of your portfolio. Pair them with mid cap or flexi cap exposure for growth potential.
Hybrid/Balanced Advantage Funds: Built-in Stability
Balanced advantage funds (BAFs) automatically adjust equity-debt allocation based on market valuations. When markets are expensive, they reduce equity. When cheap, they increase it.
This built-in risk management makes them ideal for NRIs who cannot actively monitor portfolios from abroad.
Fund Name | 5-Year CAGR | 3-Year CAGR | Equity Range | AUM (₹ Cr) |
|---|---|---|---|---|
HDFC Balanced Advantage | 20.3% | 18.1% | 40-75% | 1,01,079 |
ICICI Prudential BAF | 13.9% | 12.8% | 30-80% | 68,450 |
Edelweiss Balanced Advantage | 16.3% | 14.5% | 30-80% | 12,450 |
Nippon India BAF | 15.8% | 13.2% | 40-75% | 9,875 |
Data as of December 2025. Source: Business Today, Value Research
HDFC Balanced Advantage vs ICICI Prudential BAF
These two giants represent different philosophies:
HDFC Balanced Advantage Fund:
- Higher returns (20.3% vs 13.9% over 5 years)
- Higher volatility
- More aggressive equity allocation
- Best for: Growth-oriented investors comfortable with swings
ICICI Prudential Balanced Advantage Fund:
- Lower but steadier returns
- India's oldest BAF (launched 2006)
- More conservative approach
- Best for: Conservative investors prioritizing stability
According to Business Today, HDFC BAF is ideal for investors preferring dynamic asset allocation, while ICICI Pru BAF suits those seeking consistent, moderate growth.
Mid Cap Funds with Consistency
Mid caps are inherently volatile, but some funds manage risk better than others.
Fund Name | 5-Year CAGR | Sharpe Ratio | Standard Deviation | Downside Protection |
|---|---|---|---|---|
Kotak Emerging Equity | 24.8% | 0.58 | 15.2% | Good |
HDFC Mid Cap Opportunities | 27.4% | 0.62 | 16.1% | Strong |
Axis Midcap Fund | 21.5% | 0.52 | 14.8% | Excellent |
Motilal Oswal Midcap | 30.5% | 0.71 | 17.3% | Moderate |
Data as of December 2025. Source: Equitymaster, Scripbox
Standout: HDFC Mid Cap Opportunities
With ₹89,383 crore in AUM and 25.7% 3-year CAGR, this fund has delivered consistent outperformance. The fund recovered strongly after the 2020 crash and 2023 corrections, demonstrating resilience.
Small Cap Funds: High Risk, Some Consistency
Small caps are the most volatile category. Yet some funds have maintained impressive long-term consistency.
Fund Name | 5-Year CAGR | 10-Year Rolling CAGR | Standard Deviation |
|---|---|---|---|
SBI Small Cap | 28.3% | 21.2% | 18.5% |
Nippon India Small Cap | 36.7% | 23.5% | 19.8% |
Axis Small Cap | 26.8% | 20.7% | 17.2% |
HSBC Small Cap | 29.1% | 19.8% | 18.9% |
Data as of December 2025. Source: Equitymaster
Note: Small cap funds deliver impressive returns but with high volatility. They're suitable only for investors with 7+ year horizons and high risk tolerance.
👉 Tip: Limit small cap allocation to 15-20% of your equity portfolio. Use SIP investments to average out volatility.
Funds That Protect During Market Falls
Consistency also means limiting losses during crashes. Here's how top funds performed during major corrections:
Performance During March 2020 COVID Crash
Fund Name | Peak-to-Trough Fall | Recovery Time | Benchmark Fall |
|---|---|---|---|
Parag Parikh Flexi Cap | -28% | 7 months | -38% (Nifty 500) |
HDFC Balanced Advantage | -22% | 5 months | -38% (Nifty 50) |
Canara Robeco Bluechip | -31% | 8 months | -38% (Nifty 100) |
ICICI Prudential BAF | -18% | 4 months | -38% (Nifty 50) |
Funds with international diversification (Parag Parikh) or dynamic allocation (HDFC BAF, ICICI Pru BAF) fell less and recovered faster.
Performance During 2022 Correction
Fund Name | Calendar Year 2022 Return | Category Average |
|---|---|---|
Parag Parikh Flexi Cap | -4.2% | -8.5% |
HDFC Flexi Cap | +8.3% | -8.5% |
ICICI Prudential BAF | +6.8% | +2.1% |
Canara Robeco Bluechip | -2.1% | -5.8% |
Funds with value orientation and lower PE portfolios protected capital better during the 2022 rate hike cycle.
The Consistency Framework: How to Evaluate Any Fund
Use this checklist before investing in any mutual fund:
Step 1: Check Rolling Returns (3-year and 5-year)
Access rolling return data on Value Research or Morningstar India.
Look for:
- Average rolling return above category average
- Positive returns in 80%+ of rolling periods
- Narrow spread between best and worst periods
Step 2: Analyze Risk Metrics
Metric | What to Look For |
|---|---|
Standard Deviation | Below category average |
Sharpe Ratio | Above 0.5 for equity funds |
Sortino Ratio | Above 1.0 |
Beta | Below 1.0 for defensive funds |
Alpha | Consistently positive |
Step 3: Review Downside Capture
Check how the fund performed during:
- March 2020 COVID crash
- 2022 rate hike correction
- Any other significant market falls
Consistent funds typically have downside capture ratios below 90%.
Step 4: Assess Fund Manager Track Record
A skilled manager makes the difference. Check:
- How long has the current manager been with the fund?
- What is their track record across market cycles?
- Do they have a clear, articulated investment philosophy?
Step 5: Consider Expense Ratio
Lower expenses compound to significant savings. Compare expense ratios within the same category.
👉 Tip: Use Belong's Residential Status Calculator to confirm your NRI status before making investment decisions.
Building a Consistent Returns Portfolio
Here are sample portfolios optimized for consistency over maximum returns:
Conservative Portfolio (Target: 12-15% CAGR with low volatility)
Fund | Allocation | Expected Role |
|---|---|---|
ICICI Prudential BAF | 40% | Core stability |
Canara Robeco Bluechip | 30% | Large cap anchor |
UTI Nifty 50 Index Fund | 20% | Low-cost diversification |
HDFC Liquid Fund | 10% | Emergency buffer |
Expected Standard Deviation: 10-12%
Balanced Portfolio (Target: 15-18% CAGR with moderate volatility)
Fund | Allocation | Expected Role |
|---|---|---|
Parag Parikh Flexi Cap | 35% | Core holding with global exposure |
HDFC Balanced Advantage | 25% | Dynamic allocation |
Nippon India Large Cap | 20% | Large cap stability |
Kotak Midcap Fund | 15% | Growth kicker |
Liquid Fund | 5% | Rebalancing buffer |
Expected Standard Deviation: 12-15%
Growth Portfolio (Target: 18-22% CAGR, higher volatility acceptable)
Fund | Allocation | Expected Role |
|---|---|---|
HDFC Flexi Cap | 30% | Aggressive core |
Parag Parikh Flexi Cap | 25% | Balanced growth |
HDFC Mid Cap Opportunities | 20% | Mid cap exposure |
SBI Small Cap | 15% | High growth potential |
Index Fund | 10% | Diversification |
Expected Standard Deviation: 15-18%
NRI-Specific Considerations
FATCA Compliance
US and Canada NRIs face restrictions. Not all AMCs accept investments from these countries due to FATCA requirements.
AMCs accepting US/Canada NRIs:
- SBI Mutual Fund
- UTI Mutual Fund
- Nippon India Mutual Fund
- Franklin Templeton
Parag Parikh Flexi Cap, despite its US stock holdings, does accept US NRI investors through specific channels.
Tax Efficiency
For NRIs, TDS is deducted at source:
- STCG (holding < 12 months): 20%
- LTCG (holding > 12 months): 12.5% on gains above ₹1.25 lakh
Consistent funds with lower turnover generate fewer taxable events, improving after-tax returns.
GIFT City Alternative
For truly consistent returns without market volatility, consider GIFT City fixed deposits:
- USD-denominated (no currency risk)
- Zero capital gains tax for NRIs
- Returns of 4.5-5.5% in USD
Explore options via Belong's NRI FD Comparison Tool.
Currency Hedging Through Fund Selection
Funds with international exposure (Parag Parikh, Kotak US Equity) provide natural rupee depreciation protection. When INR weakens against USD, these holdings gain value in rupee terms.
Common Mistakes That Kill Consistency
Mistake 1: Chasing Last Year's Topper
The fund that gained 50% last year often underperforms next year. Small cap and sectoral funds frequently top annual charts but deliver inconsistent long-term returns.
Solution: Focus on 5-year and 10-year performance across market cycles.
Mistake 2: Switching Funds Too Often
Every switch:
- Triggers capital gains tax
- Creates entry/exit load costs
- Resets your holding period
Solution: Select consistent funds and hold for 7+ years. Review annually but switch only when fundamentally necessary.
Mistake 3: Ignoring Risk Metrics
Two funds with 20% returns may have vastly different risk profiles. One might achieve it with steady growth; another through wild swings.
Solution: Always check Sharpe ratio, standard deviation, and downside capture alongside returns.
Mistake 4: Over-diversifying
Holding 15 funds doesn't reduce risk. It creates overlap and averages out to index-like returns with active fund fees.
Solution: 4-6 well-chosen funds across categories provide adequate diversification.
Mistake 5: Timing the Market
NRIs living abroad often try to time investments based on news headlines. This usually backfires.
Solution: Use SIP investing to average purchase costs and remove timing decisions.
When Consistency Matters Most
Near Retirement (5-10 Years Away)
At this stage, protecting capital matters more than maximizing returns. A 30% market fall just before retirement can devastate your corpus.
Recommended approach:
- Shift 50-60% to balanced advantage or hybrid funds
- Reduce small cap exposure to zero
- Consider GIFT City FDs for guaranteed portions
Building Emergency Fund
Your emergency fund should never be in volatile instruments.
Recommended: Liquid funds or overnight funds with consistent 6-7% returns and no exit load.
Children's Education (Fixed Timeline)
College expenses arrive on schedule regardless of market conditions.
Recommended: As the date approaches, move from equity to balanced funds, then to debt funds. Use goal-based planning.
Retirement Corpus (Already Retired)
Regular income needs require capital preservation.
Recommended:
- 30-40% in balanced advantage funds
- 40-50% in debt funds or senior citizen schemes
- 10-20% in large cap for inflation beating
Conclusion: Consistency Wins the Race
Wealth building is a marathon, not a sprint. The funds that deliver 16-20% year after year will outperform those swinging between 40% and -20%.
Key takeaways:
- Use rolling returns, Sharpe ratio, and standard deviation to measure consistency
- Parag Parikh Flexi Cap and Canara Robeco Bluechip lead their categories in consistency
- Balanced advantage funds (HDFC BAF, ICICI Pru BAF) offer built-in risk management
- Downside protection matters as much as upside capture
- Build a portfolio of 4-6 consistent funds rather than chasing annual toppers
Your next step:
Join Belong's WhatsApp community to discuss fund selection with other NRIs and learn from real experiences. Or download the Belong app to explore GIFT City investment options that offer consistent, tax-efficient returns.
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