Three years ago, a Dubai-based engineer named Ravi asked me a simple question during one of our community calls.
He had AED 50,000 sitting idle in his NRE account. His plan was to invest it and forget about it until his daughter turned 18, exactly 15 years away.
"Which mutual fund should I put this in?" he asked.
My answer surprised him. I told him the fund he picks matters less than the category he chooses and how long he stays invested.
A 10-year investment horizon changes everything. It smooths out volatility, harnesses compounding, and turns even average funds into wealth creators.
Since then, I've helped hundreds of NRIs build long-term portfolios. This guide shares the same framework I use with my clients at Belong.
Why 10 Years Changes the Investment Game
When you invest for 10 or more years, you're not betting on market timing. You're betting on India's growth story.
Consider this: The HDFC Flexi Cap Fund has delivered more than 10% CAGR in nearly 96% of all 10-year rolling return periods since inception. That's not luck. That's the power of staying invested through market cycles.
Short-term investors panic during corrections. Long-term investors see them as opportunities. The 2008 crash, the 2020 COVID fall, the 2022 correction, investors who stayed put through all of these came out ahead.
👉 Tip: Before selecting any fund, use Belong's Residential Status Calculator to confirm your NRI status. Your tax treatment depends on it.
How We Ranked These Funds
I want to be upfront about the methodology. Picking "best" funds without explaining the criteria is misleading. Different rankings serve different purposes.
Our ranking parameters include:
Parameter | Why It Matters |
|---|---|
5-Year CAGR | Shows performance across multiple market cycles |
10-Year CAGR | Proves long-term consistency |
AUM Size | Indicates investor confidence and liquidity |
Expense Ratio | Lower costs mean more returns in your pocket |
Fund Manager Track Record | Experience matters during volatility |
I've created multiple lists below. Each serves a different investor need. Pick the one that matches your priority.
List 1: Top Flexi Cap Funds by 10-Year Returns
Flexi cap funds can invest across large, mid, and small cap stocks. This flexibility makes them ideal for long-term wealth creation.
1. Parag Parikh Flexi Cap Fund
This fund has become a favourite among NRIs for good reason. It's one of the few Indian funds that invests in global stocks like Alphabet, Meta, and Amazon alongside Indian blue-chips like HDFC Bank and ICICI Bank.
Key Numbers:
- AUM: Rs 1,29,783 Crore (as of December 2025)
- 5-Year Return: 20.90% CAGR
- Expense Ratio: 0.63%
- Fund Manager: Rajeev Thakkar (since 2013)
What sets it apart is the international diversification. When Indian markets correct, global holdings provide cushion. The fund has consistently outperformed its benchmark Nifty 500 across 1, 3, 5, and 10-year periods.
2. HDFC Flexi Cap Fund
One of India's oldest equity funds, launched over 30 years ago. Its track record through multiple market cycles is unmatched.
Key Numbers:
- AUM: Rs 94,068 Crore (as of December 2025)
- 5-Year Return: 24.51% CAGR
- 3-Year Return: 21.59% CAGR
- Expense Ratio: 0.67%
The fund follows a value-oriented approach. It has heavy exposure to banking stocks, with ICICI Bank, HDFC Bank, Axis Bank, and SBI making up significant portions of the portfolio.
3. Franklin India Flexi Cap Fund
A veteran fund with assets of Rs 186.79 billion that follows a disciplined, bottom-up stock selection approach.
Key Numbers:
- 10-Year Return: Approximately 15.77% CAGR
- Top Holdings: HDFC Bank (8.8%), ICICI Bank (8.4%), Bharti Airtel (4.2%)
- Sector Focus: Financials (25.3%), IT (9.6%), Healthcare (7.3%)
The fund doesn't chase short-term trends. Its focus on quality and valuation has delivered steady long-term returns.
👉 Tip: Compare flexi cap funds side by side using Belong's Mutual Funds Explorer to see which aligns with your risk profile.
Fund Name | 5Y CAGR | AUM (Cr) | Expense Ratio |
|---|---|---|---|
HDFC Flexi Cap Fund | 24.51% | 94,068 | 0.67% |
Parag Parikh Flexi Cap Fund | 20.90% | 1,29,783 | 0.63% |
Franklin India Flexi Cap Fund | ~15.77% (10Y) | 18,679 | 0.91% |
Data as of December 2025. Source: Value Research, Tickertape
List 2: Top Small Cap Funds for Aggressive Long-Term Growth
Small cap funds carry higher risk but also higher return potential over 10+ years. These are suitable only if you can stomach 40-50% drawdowns during corrections.
1. Nippon India Small Cap Fund
The largest small cap fund in India with over Rs 68,000 crore in assets. The fund holds 233 stocks, providing exceptional diversification within the small cap space.
Key Numbers:
- AUM: Rs 68,969 Crore
- 5-Year Return: 27.32% CAGR
- Fund Manager: Samir Rachh (since 2017)
- Number of Stocks: 233
The fund has faced capacity constraints. It limited new subscriptions in July 2023 due to its massive size. Still accepting SIPs, but lump sum investments face restrictions.
2. SBI Small Cap Fund
Known for consistent performance and disciplined stock selection. The fund manager R. Srinivasan has been at the helm since 2013, providing stability and continuity.
Key Numbers:
- Morningstar Rating: 5 Stars
- Focus: Quality companies with strong fundamentals
- Awards: ET Wealth Best Small Cap Fund (2023)
The fund focuses on emerging leaders in India's growth sectors. Top holdings include Elgi Equipments, Blue Star, and Hawkins.
3. HDFC Small Cap Fund
Follows a value-driven approach in the small cap space. It invests in fundamentally strong companies trading below their intrinsic value.
Key Numbers:
- 5-Year Return: 26.13% CAGR
- 3-Year Return: 20.65% CAGR
- Investment Style: Value-oriented
The fund has 86 stocks in its portfolio, fewer than Nippon but still well-diversified.
Fund Name | 5Y CAGR | 3Y CAGR | AUM (Cr) |
|---|---|---|---|
Nippon India Small Cap | 27.32% | ~21% | 68,969 |
HDFC Small Cap | 26.13% | 20.65% | ~35,000 |
SBI Small Cap | ~24% | ~20% | ~30,000 |
Data as of December 2025. Source: Value Research, Fund Factsheets
👉 Tip: Small cap funds are volatile. Start with a SIP vs Lumpsum analysis to decide your investment approach.
List 3: Top Index Funds by AUM (For Passive Investors)
Index funds are perfect for NRIs who want market returns without fund manager risk. They simply track the Nifty 50 or other indices.
1. UTI Nifty 50 Index Fund
The largest and oldest Nifty 50 index fund in India with a 25-year track record.
Key Numbers:
- AUM: Rs 25,748 Crore (highest in category)
- Expense Ratio: 0.19%
- Tracking Error: Very low
The fund closely mirrors the Nifty 50 index. HDFC Bank makes up about 12.8% of the portfolio, followed by Reliance, Infosys, and ICICI Bank.
2. SBI Nifty Index Fund
Another solid option backed by India's largest bank.
Key Numbers:
- AUM: Rs 11,312 Crore
- Track Record: 23 years
- Expense Ratio: ~0.20%
In the past month alone, SBI Nifty Index Fund saw Rs 494 crore in net AUM growth, showing strong investor demand.
3. HDFC Nifty 50 Index Fund
HDFC's passive offering for investors seeking low-cost Nifty exposure.
Key Numbers:
- Expense Ratio: Among the lowest in category
- Minimum SIP: Rs 100
- Minimum Lumpsum: Rs 100
For first-time investors, index funds offer the simplest entry point into equity markets.
Fund Name | AUM (Cr) | Expense Ratio | Track Record |
|---|---|---|---|
UTI Nifty 50 Index Fund | 25,748 | 0.19% | 25 years |
SBI Nifty Index Fund | 11,312 | ~0.20% | 23 years |
HDFC Nifty 50 Index Fund | ~8,000 | ~0.20% | 10+ years |
Data as of December 2025. Source: AMC websites, INDmoney
List 4: Best Mid Cap Funds for Balanced Growth
Mid cap funds sit between the stability of large caps and the growth potential of small caps.
Invesco India Midcap Fund
This fund focuses on businesses in their high-growth phase.
Key Numbers:
- AUM: Rs 59.17 billion (as of June 2025)
- Portfolio: 49 stocks
- Top Sectors: Retailing (11.81%), Banks (10.66%), Healthcare (10.36%)
The fund maintains a moderate trading approach with a one-year portfolio turnover of 0.33, indicating a buy-and-hold philosophy.
NRI-Specific Considerations
As an NRI, your mutual fund journey comes with extra steps. Here's what you need to know.
Account Requirements
You need either an NRE or NRO account to invest. Here's the difference:
- NRE Account: Invest foreign earnings. Fully repatriable. Interest is tax-free in India.
- NRO Account: Manage Indian income. Limited repatriation (USD 1 million per year). Interest is taxable.
For most NRIs planning to take money back abroad, NRE is the better choice.
Countries with Restrictions
If you're based in the US or Canada, you face additional hurdles. FATCA (Foreign Account Tax Compliance Act) compliance means many AMCs won't accept your investments online.
AMCs that accept US/Canada NRIs (with additional paperwork):
- PPFAS Mutual Fund
- ICICI Prudential
- UTI Mutual Fund
- Franklin Templeton
- L\&T Mutual Fund
Always check directly with the AMC before starting.
👉 Tip: Use Belong's Compliance Compass to check your compliance status across banking, investments, and taxation.
Tax Treatment for NRIs
Investment Type | Holding Period | Tax Rate | TDS |
|---|---|---|---|
Equity Funds | Less than 1 year | 20% | Yes |
Equity Funds | More than 1 year | 12.5% (above Rs 1.25 lakh) | Yes |
Debt Funds | Any period | 30% | Yes |
India has DTAA agreements with over 90 countries including UAE, US, UK, and Singapore. You can claim tax credits in your resident country to avoid double taxation.
Read our detailed guide on DTAA benefits for UAE NRIs to understand how to optimize your tax situation.
The GIFT City Alternative for NRIs
Here's something most articles won't tell you. For UAE-based NRIs, traditional Indian mutual funds might not be the most tax-efficient option.
GIFT City mutual funds offer several advantages:
- No TDS: Unlike regular mutual funds where 12.5-20% is deducted at source
- USD Denomination: No currency conversion hassles
- Tax-Free for UAE NRIs: Capital gains are only taxable in your residence country (UAE has zero tax)
- Full Repatriation: No restrictions on taking money back
Several AMCs now offer GIFT City funds with minimums as low as USD 500. Tata Asset Management launched their Dynamic Equity Fund in September 2025.
Explore GIFT City mutual funds on Belong to compare your options.
For a deeper understanding, read our guide on GIFT City vs Regular Mutual Funds.
How to Build a Long-Term Portfolio
Here's the framework I recommend:
For Conservative Investors
- 60% Large Cap / Index Funds
- 30% Flexi Cap Funds
- 10% Debt Funds
For Moderate Risk Investors
- 40% Flexi Cap Funds
- 30% Mid Cap Funds
- 20% Small Cap Funds
- 10% International / GIFT City Funds
For Aggressive Investors
- 40% Small Cap Funds
- 30% Mid Cap Funds
- 20% Flexi Cap Funds
- 10% Thematic / Sectoral Funds
Remember the five-layer framework for investments that helps structure your portfolio based on goals.
👉 Tip: Don't put all your money in one fund. Spread across 4-5 funds from different categories and fund houses.
Common Mistakes to Avoid
1. Chasing Past Returns The top-performing fund last year often underperforms next year. Focus on consistency over 5-10 years, not recent performance.
2. Ignoring Expense Ratio A 0.5% difference in expense ratio compounds significantly over 10 years. Always compare direct plans.
3. Redeeming During Corrections This is the biggest mistake. Market corrections are when you should invest more, not less.
4. Not Updating KYC When your residential status changes, update your KYC immediately. Failure to do so can freeze your investments.
Learn about common NRI investment mistakes before making decisions.
Starting Your Investment Journey
Here's a simple action plan:
Step 1: Confirm your NRI status using our Residential Status Calculator
Step 2: Open an NRE account if you don't have one. Check our guide on best NRI accounts in India
Step 3: Complete KYC with the AMC or through CAMS/KFintech
Step 4: Compare funds using Belong's FD and Mutual Fund tools
Step 5: Start with SIP if unsure, or lump sum if markets have corrected
Final Thoughts
Choosing the right mutual fund matters less than staying invested for the long term. Every fund in this guide has proven itself over multiple market cycles. The key is to pick one that matches your risk appetite, start early, and stay disciplined.
If you're still unsure, join our WhatsApp community where thousands of NRIs discuss investment strategies daily. Or download the Belong app to compare GIFT City alternatives that might save you significant taxes.
Your 10-year wealth creation journey starts with a single decision. Make it today.
Sources:
- Value Research Online: https://www.valueresearchonline.com
- Morningstar India: https://www.morningstar.in
- AMC Websites: HDFC MF, PPFAS MF, SBI MF, UTI MF, Nippon India MF
- SEBI: https://www.sebi.gov.in
- Income Tax Department: https://www.incometax.gov.in
- Equitymaster Fund Strategist Reports (November/December 2025)
- Tickertape Mutual Funds Screener
- INDmoney Fund Data
Disclaimer: Mutual fund investments are subject to market risks. Past performance is not indicative of future returns. Please read scheme documents carefully before investing. Consult a qualified financial advisor for personalized advice.
