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10 Best SIPs for 3 Years Investment

Starting a Systematic Investment Plan (SIP) in mutual funds for 3 years can help you generate substantial wealth. The chunk that you’re going to invest will have the freedom to compound in the market and deliver lucrative returns. But…

Thousands of SIP mutual funds are on the market, ranging from equity to hybrid funds. It’s difficult to find the ideal one and understandably so. Today, we will look at the top 10 SIPs that are the best SIP to invest for 3 years.

10 Best SIPs for 3 Years Investment

SIP Mutual Fund3-Year Returns
HDFC ELSS Tax Saver Direct Plan-Growth24.95%
SBI Contra Fund Direct Plan-Growth30.13%
JM Flexi Cap Fund Direct-Growth24.90%
HDFC Focused 30 Fund Direct-Growth27.55%
ICICI Large & Mid Cap Fund Direct-Growth24.86%
Nippon India Large Cap Fund Direct Plan-Growth22.80%
HDFC Mid-Cap Opportunities Fund Direct-Growth26.97%
Nippon India Multicap Fund Direct-Growth26.93%
Invesco India Infrastructure Fund Direct-Growth30.41%
Franklin India Smaller Companies Fund Direct-Growth27.57%

1. HDFC ELSS Tax Saver Direct Plan-Growth

If there was ever a best SIP for 3 years, it’d be an Equity Linked Savings Scheme (ELSS) fund. ELSS funds come with the dual benefit of tax saving and equity-based returns. 

This ELSS fund comes with a 3-year lock-in and is eligible for tax deductions to the tune of ₹1.5 lakhs. 

  • Fund Size: ₹13,440.70 Cr
  • Expense Ratio: 1.14%
  • 3-year SIP Return: 26.28%
  • 5-year SIP Return: 19.30%

2. SBI Contra Fund Direct Plan-Growth

SBI Contra Fund invests inversely to the general market, meaning it takes a contrarian approach to selecting stocks. 

Instead of immediate winners, they pick underperforming companies whose stock may have a bright future.

Around 75% of fund assets are invested in equities and remaining in debt, and this is typically suitable for seasoned investors who are adept at analyzing macro trends. Mr. Dinesh Balachandran manages the fund. 

  • Fund Size: ₹16,167 crore
  • Expense Ratio: 0.77%
  • 3-year SIP Return: 32.30%
  • 5-year SIP Return: 27.06%

3. JM Flexi Cap Fund Direct-Growth

JM Flexi Cap Fund is equity-weighted and invests in all categories of market cap. Generally, flexi-cap funds have a large-cap tilt.

Investing across market caps allows the fund to balance risk and returns. Mr. Chaitanya Choksi manages the fund.

  • Fund Size: ₹1,437.98 crore
  • Expense ratio: 0.96%
  • 3-year SIP Return: 27.60%
  • 5-year SIP Return: 24.70% 

4. HDFC Focused 30 Fund Direct-Growth

A focused fund typically invests in the best 30 stocks in the large, mid, and small-cap categories, and HDFC Focused 30 Fund is no different. 

The fund invests ~85% in equities and has a large-cap tilt. Mr. Roshi Jain is the fund manager of this HDFC fund.

  • Fund Size: ₹9,317.00 crore
  • Expense ratio: 0.52%
  • 1-year SIP return: 23.49%
  • 3-year SIP return: 24.1% 

5. ICICI Large & Mid Cap Fund Direct-Growth

ICICI Large & Mid Cap Fund primarily invests in large and mid-cap stocks. A majority of capital is invested in equities, with >50% in large-cap and ~20 in mid-cap. Mr. Ihab Dalwai leads the fund with his team.

  • Fund Size: ₹11,333.37 crore
  • Expense ratio: 0.83%
  • 1-year SIP return: 23.07%
  • 3-year SIP return: 20.61%

6. Nippon India Large Cap Fund Direct Plan-Growth

Nippon India Large Cap Fund is large-cap weighted and allows investors to reap the rewards of India’s thriving large-cap market. 

It also includes mid and small-caps for diversification. Mr. Sailesh Raj Bhan takes the onus of generating the returns for this fund.

  • Fund Size: ₹16,633.52 crore
  • Expense ratio: 0.87%
  • 1-year SIP return: 22.28%
  • 3-year SIP return: 19.93%

7. HDFC Mid-Cap Opportunities Fund Direct-Growth

Mid-cap stocks are relatively more volatile than large-cap stocks. This fund aims to invest in mid-cap (~54%) and the rest in large and small caps. 

Investors intending to invest for the long term and ride the volatility of mid-cap stocks can invest in this fund. Mr. Chirag Setalvad is the fund manager of this fund.

  • Fund Size: ₹47,846 crore
  • Expense ratio: 0.85%
  • 1-year SIP return: 41.27%
  • 3-year SIP return: 28.05% 

8. Nippon India Multicap Fund Direct-Growth

This fund invests in various market capitalizations based on where the fund manager sees the opportunity. 

The fund has invested 21.66% in small caps, 25.5% in Mid-caps, and 34.58% in large caps.

Mr. Sailesh Raj Bhan takes the call to move the investments into different market capitalizations.

  • Fund Size: ₹20,930 crore
  • Expense ratio: 0.94%
  • 1-year SIP return: 33.31%
  • 3-year SIP return: 27.19% 

9. Invesco India Infrastructure Fund Direct-Growth

This is a thematic fund that focuses on the infrastructure sector, aiming to generate returns through the domain’s growth. 

Thematic funds are considered to be relatively high risk due to the hyperfocused nature of the investments, and that’s why investors must exercise caution.

Mr. Amit Nigam manages the fund along with his team.

  • Fund Size: ₹616.96 crore
  • Expense ratio: 0.91%
  • 1-year SIP return: 40.28%
  • 3-year SIP return: 26.89% 

10. Franklin India Smaller Companies Fund Direct-Growth

The fund is invested more than 50% in small-cap stocks and the rest in large-cap, mid-cap, and government securities. 

Small-cap funds are invested in small-cap companies, where the fund manager’s prowess is in test and the expectation of Alpha is generally high. Mr. R Janakiraman manages the fund. 

  • Fund Size: ₹9,683.62 crore
  • Expense ratio: 0.95%
  • 1-year SIP return: 49.39%
  • 3-year SIP return: 30.96%

This brings us to the end of the best mutual funds for a 3-year SIP plan.

Conclusion

While we have seen the best SIPs for 3 years investment, there are many nuances to investing in a mutual fund that you should be cognizant of. 

It’s important to note that no fund or metric should be looked at in isolation and a holistic view can help you to achieve the expected return and subsequent goals such as financial freedom.

You must also look at other factors and technical ratios like Jensen’s Alpha, Treynor Ratio, etc. before making a decision on any of the best SIPs for 3 years investment. 

Note: This blog is not to be construed as investment advice. Please do your own due diligence when investing in mutual funds. The mutual funds mentioned above are examples, not recommendations.  

Shriram Shekhar

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