10 years, 7 MF categories: Which mutual fund category created the most SIP wealth for investors?

Small-cap and mid-cap mutual funds emerged as the biggest wealth creators for systematic investment plan (SIP) investors over the past decade, outperforming diversified and large-cap categories by a wide margin. An analysis of the top five equity mutual funds across seven major categories shows that investors willing to take on higher risk were rewarded with significantly higher long-term returns, while large-cap funds delivered relatively modest but more stable gains.

The study, covering the period from July 1, 2016, to July 15, 2026, compares the top five funds in the Flexi Cap, Focused, Large & Mid Cap, Large Cap, Mid Cap, Multi Cap and Small Cap categories based on their 10-year SIP returns. It also incorporates five-year rolling return data to assess consistency across different market cycles.

Small Cap funds

Among all categories, Small Cap funds emerged as the clear winner, with the top five schemes delivering an average 10-year SIP return of nearly 23%. The standout performer was Quant Small Cap Fund, which generated a 25.95% annualised SIP return, followed by Nippon India Small Cap Fund (22.44%), Axis Small Cap Fund (20.76%), Union Small Cap Fund (20.33%) and DSP Small Cap Fund (20.11%).

The performance reflects the strong rally in India's broader markets over the past decade, during which smaller companies benefited from improving corporate earnings, rising domestic participation and expanding economic opportunities. However, experts caution that the same category is also among the most volatile during market corrections.

Mid Cap funds

Mid Cap funds ranked second, producing an average 10-year SIP return of around 21%. Invesco India Mid Cap Fund led the category with a return of 22.13%, while Edelweiss Mid Cap Fund (21.52%), Nippon India Growth Mid Cap Fund (21.04%), Quant Mid Cap Fund (20.59%) and Motilal Oswal Midcap Fund (20.49%) also delivered annualised SIP returns above 20%. 

Average 10-year SIP returns by category

Category	Average 10-Year SIP Return*
Small Cap	~22.9%
Mid Cap	~21.0%
Flexi Cap	~18.2%
Multi Cap	~17.8%
Large & Mid Cap	~17.7%
Focused	~17.2%
Large Cap	~14.4%

Flexi Cap funds vs Multi caps

Diversified equity categories continued to generate competitive long-term returns. Flexi Cap funds averaged just over 18%, led by Quant Flexi Cap Fund, whose 10-year SIP return stood at 21.16%. Other prominent performers included Parag Parikh Flexi Cap Fund, HDFC Flexi Cap Fund, JM Flexicap Fund and Edelweiss Flexi Cap Fund, demonstrating that diversified portfolios can still deliver strong long-term wealth creation.

Multi Cap funds also posted healthy returns, averaging nearly 18% across the top five schemes. Quant Multi Cap Fund topped the category with an annualised SIP return of 18.98%, while Nippon India Multicap Fund, ICICI Prudential Multicap Fund, Invesco India Multicap Fund and Baroda BNP Paribas Multi Cap Fund also generated double-digit returns over the decade.

Large & Mid Cap category

The Large & Mid Cap category occupied the middle of the rankings, with average SIP returns of around 18%. Invesco India Large & Mid Cap Fund led the pack with a 19.02% return, followed by Bandhan Large & Mid Cap Fund, ICICI Prudential Large & Mid Cap Fund, Quant Large and Mid Cap Fund and HDFC Large and Mid Cap Fund.

Focused funds

Focused funds, which invest in a concentrated portfolio of stocks, delivered average returns of about 17%. ICICI Prudential Focused Equity Fund topped the category with an 18% 10-year SIP return, ahead of HDFC Focused Fund and Quant Focused Fund.

At the other end of the spectrum, Large Cap funds recorded the lowest average 10-year SIP returns, at around 14% to 15%. Nippon India Large Cap Fund was the best performer in the category with a 15.23% return, followed by Invesco India Largecap Fund and ICICI Prudential Large Cap Fund.

The findings reinforce a key investment lesson: higher-risk categories have historically generated superior long-term returns, but they require patience and the ability to withstand market volatility. While small-cap and mid-cap funds have delivered the highest SIP wealth creation over the last decade, financial planners recommend that investors align their fund selection with their risk appetite, investment horizon and asset allocation strategy rather than relying solely on past returns.