GUIDESMUTUAL FUNDS
Your Guide to Finding the Best SIP to Invest in Now
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LAST EDITED BY ANKANA GHOSHAL ON SEPTEMBER 12, 2025.
LAST EDITED BY ANKANA GHOSHAL ON SEPTEMBER 12, 2025.
GUIDES LAST EDITED BY ANKANA GHOSHAL ON SEPTEMBER 12, 2025.
Investing in a Systematic Investment Plan (SIP) has long been recognised as a disciplined approach to wealth creation. By allowing investors to contribute fixed amounts regularly, SIPs mitigate the risks associated with market volatility and harness the power of compounding. As we step into 2025, the landscape of mutual funds in India offers a plethora of options tailored to various financial goals and risk appetites. This guide delves into some of the best SIP mutual funds to consider this year, ensuring your investment journey is both informed and rewarding.
Before exploring specific funds, it's essential to understand SIPs and why they are favoured by both novice and seasoned investors.
A SIP is an investment strategy where individuals invest a fixed sum regularly—be it monthly, quarterly, or annually—into a mutual fund scheme. This methodical approach promotes financial discipline and reduces the impact of market fluctuations over time.
Rupee Cost Averaging: Regular investments ensure that you purchase more units when prices are low and fewer units when prices are high, averaging out the cost over time.
Power of Compounding: Earnings on your investments generate their own earnings, leading to exponential growth over the long term.
Financial Discipline: Automated regular investments cultivate a habit of saving and investing, which is crucial for long-term wealth accumulation.
Selecting the right mutual fund aligns with your financial objectives, risk tolerance, and investment horizon. Here are some top-performing funds across various categories:
| Scheme Name | Return 5 Year (%) Direct | Daily AUM (Cr.) |
| Quant Small Cap Fund | 48.23 | 23,817.70 |
| Quant Infrastructure Fund | 41.72 | 3,038.91 |
| ICICI Prudential Commodities Fund | 40.26 | 2,542.97 |
| ICICI Prudential Infrastructure Fund | 37.29 | 7,015.25 |
| Quant ELSS Tax Saver Fund | 37.05 | 9,930.78 |
| Quant Flexi Cap Fund | 36.67 | 6,427.04 |
| Nippon India Small Cap Fund | 36.52 | 52,339.65 |
| Quant Mid Cap Fund | 36.11 | 7,921.36 |
| Bandhan Small Cap Fund | 35.45 | 8,777.94 |
| SBI Contra Fund | 35.04 | 40,233.67 |
| ICICI Prudential India Opportunities Fund | 34.87 | 24,008.14 |
| Bandhan Infrastructure Fund | 34.48 | 1,453.27 |
| Bank of India Small Cap Fund | 33.73 | 1,446.04 |
| ICICI Prudential Technology Fund | 33.71 | 12,502.97 |
| ICICI Prudential Dividend Yield Equity Fund | 33.59 | 4,682.91 |
Source: Value Research
Overview: This fund focuses on small-cap stocks with high growth potential. It follows an aggressive investment strategy, dynamically adjusting exposure based on market conditions.
AUM: ₹22,832 crore
Top Holdings: Reliance Industries (10.58%), Jio Financial Services (4.78%), Aegis Logistics (4.39%)
Sector Allocation:
Services (17.88%)
Energy (15.22%)
Healthcare (15.13%)
Financial (13.99%)
Performance:
1-Year: -8.38%
3-Year CAGR: 21.72%
5-Year CAGR: 40.83%
Key Metrics:
Expense Ratio: Direct- 0.68%, Regular- 1.65%
Sharpe Ratio: 0.82
Portfolio Beta: 1.06
Overview: This fund invests majorly in infrastructure theme stocks with the freedom to invest across market caps. The scheme capitalises on expanding infrastructure investment opportunities, making it ideal for long-term, high-risk investors.
AUM: ₹2,914 crore
Top Holdings: Larsen & Toubro (10.08%), Reliance Industries (10.08%), ITC Ltd. (8.85%)
Sector Allocation:
Equity & Equity Related Instruments (97.47%)
Money Market Instruments
Net Current Assets (2.53%)
Performance:
1-Year: -14.16%
3-Year CAGR: 19.00%
5-Year CAGR: 33.57%
Key Metrics:
Expense Ratio: Expense Ratio: Direct- 0.75%, Regular- 1.97%
Sharpe Ratio: 1.11
Portfolio Beta: 1.13
Overview: ICICI Prudential Commodities Fund invests in commodity-related sectors like metals, mining, and chemicals, aiming for long-term capital appreciation. It benefits from global commodity cycles and infrastructure growth but carries sectoral volatility. Ideal for high-risk investors seeking exposure to commodity-driven industries.
AUM: ₹2,390.54 crore
Top Holdings: Jindal Steel & Power (9.41%), JSW Steel (7.96%), Hindalco (7.29%), Ambuja Cements (6.80%)
Sector Allocation:
Metals & Mining (44.55%)
Chemicals (30.82%)
Construction Materials (19.54%)
Performance:
1-Year: -3.44%
3-Year CAGR: 14.33%
5-Year CAGR: 30.88%
Key Metrics:
Expense Ratio: Direct- 1.05%, Regular- 2.06%
Sharpe Ratio: 0.49
Portfolio Beta: 0.84
Overview: ICICI Prudential Infrastructure Fund focuses on companies driving India's infrastructure growth, including construction, capital goods, and power. It aims for long-term capital appreciation by leveraging policy-driven investments and economic expansion. Best suited for high-risk investors seeking exposure to the infrastructure sector.
AUM: ₹6,886.49 crore
Top Holdings: Larsen & Toubro (9.43%), Adani Ports (4.19%), Shree Cements (3.90%), ICICI Bank (3.48%)
Sector Allocation:
Financial Services (16.91%)
Construction (16.79%)
Capital Goods (12.45%)
Construction Materials (11.94%)
Performance:
1-Year: 1.57%
3-Year CAGR: 26.87%
5-Year CAGR: 29.29%
Key Metrics:
Expense Ratio: Direct- 1.16%, Regular- 1.87%
Sharpe Ratio: 1.26
Portfolio Beta: 0.53
Overview: Quant ELSS Tax Saver Fund follows a flexi-cap approach, making it ideal for long-term investors while offering 80C tax savings benefits.
AUM: ₹9,486 crore
Top Holdings: Reliance Industries (10.09%), Adani Power (7.11%), Samvardhana Motherson (6.27%)
Sector Allocation: Broad diversification across Financials, Infrastructure, and Industrial sectors
Performance:
1-Year: -11.30%
3-Year CAGR: 15.15%
5-Year CAGR: 30.35%
Key Metrics:
Expense Ratio: Expense Ratio: Direct- 0.5%, Regular- 1.68%
Sharpe Ratio: 1.07
Portfolio Beta: 1.06
Investing is a personalised journey, and what suits one investor might not be ideal for another. Here are key considerations to guide your selection:
Investment Horizon: Align your fund choice with your financial goals. Equity funds generally suit long-term objectives (5 years or more), while debt funds may cater to short-term goals.
Risk Appetite: Assess your comfort with market volatility. While small-cap funds offer higher growth potential, they come with increased risk compared to large-cap funds.
Fund Performance: Examine the fund's historical performance, but remember that past results don't guarantee future returns. Consistency over different market cycles is a positive indicator.
Expense Ratio: Lower expense ratios can enhance net returns. Ensure the fund's costs are justified by its performance.
Fund Manager's Track Record: A seasoned fund manager with a robust track record can significantly influence a fund's success.
Embarking on your SIP journey is straightforward:
Define Your Financial Goals: Determine what you're investing in—retirement, a home, or children's education.
Select the Right Fund: Based on your goals and risk profile, choose a fund that aligns with your objectives.
Complete KYC Formalities: As mandated by regulatory authorities, complete the Know Your Customer process, which involves submitting identification and address proofs.
Choose the SIP Amount and Frequency: Decide the investment amount and whether you'll contribute monthly, quarterly, or annually.
Monitor and Review: Regularly review your investments to ensure they remain aligned with your goals, making adjustments as necessary.
Investing in SIPs offers a structured pathway to achieve your financial aspirations, leveraging the benefits of regular investing and compounding. The funds highlighted above have demonstrated commendable performance, but it's crucial to conduct thorough research and consult a financial advisor before making investment decisions. Market conditions, economic policies, and individual financial goals are vital in determining the right SIP for you. You can maximise your returns and secure long-term financial growth by staying informed, reviewing your portfolio periodically, and maintaining a disciplined approach.
Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully. This article should not be taken as investment advice. The list of funds mentioned above are based on ratings assigned by Value Research, and not a form of recommendation by Fi.
For an investment horizon of less than 3 years, Debt Funds are the best option for stability and predictable returns.
For a 1-year SIP, Ultra Short-Term Debt Funds offer low risk and better returns than a savings account. Arbitrage Funds can also be considered for slightly higher, tax-efficient returns with minimal volatility.
Yes, you can withdraw your SIP investment anytime, except in certain cases.
Most mutual funds allow flexible withdrawals, meaning you can redeem your money whenever needed. However, some funds may have an exit load (a small fee) if withdrawn within a specific period, usually before 1 year.
An exception is ELSS (Equity Linked Savings Scheme), which has a 3-year lock-in since it offers tax benefits.
Both SIP (Systematic Investment Plan) and lump sum have their advantages, and the better approach depends on market conditions and your financial goals.
SIP spreads your investment over time, reducing risk and averaging out market fluctuations. It’s ideal for beginners and volatile markets.
Lump sum works best when markets are low, allowing you to invest a large amount at once for higher potential returns.
A smart approach is to invest regularly via SIP for discipline and consistency, then top up with a lump sum during market corrections to maximise returns.
Cancelling a SIP (Systematic Investment Plan) is simple and has no penalty.
Yes, you can start a SIP (Systematic Investment Plan) even when the market is high.
Yes, SIP (Systematic Investment Plan) is great for the long term.
For a 10-year investment horizon, Equity Mutual Funds are the best option as they offer high growth potential.
If you prefer lower risk, consider a Balanced or Hybrid Fund, which invests in both equity and debt.
