What Is a Good 10 Year Return on a Mutual Fund in India?

Apr, 19 2025

If you’re staring at your mutual fund statement and wondering, “Am I actually doing well?”—you’re not alone. Everybody wants to beat the market, but what’s considered “good” when you look back at a 10-year stretch in India?

Here’s a quick reality check: there’s no one-size-fits-all answer. Returns swing wildly depending on the type of fund you pick. Equity funds in India, for example, have usually given between 12% and 15% average annual returns over the past decade (as of early 2025). So if your fund sits in this range, you’re not far off from what the best managers could pull off.

But don’t be fooled by eye-popping numbers. Some funds show crazy good years and then slump right after. This is why experts keep saying: check 10 year returns, not just last year’s fireworks. Consistency matters way more than one golden year.

• What Counts as a Good 10 Year Return?
• Different Types of Mutual Funds: Who Wins the Race?
• Not Just the Numbers: What Else Makes a Fund Good?
• Smart Investor Moves: Tips for the Next Decade

What Counts as a Good 10 Year Return?

Let’s talk straight—when you think about a 10 year return on any mutual fund in India, you don’t want just any number. You want a number that’s worth your risk and patience. Historically, decent equity mutual funds in India have clocked in between 12% and 15% annualized returns over a decade—sometimes a bit more if the markets are strong, like during the bull runs of 2014-2019 and 2020-2023. Debt funds, by comparison, typically deliver much less, often in the 6-8% range. Hybrid funds sit somewhere in the middle.

Here’s a look at how some common mutual fund types have fared in India over the last 10 years:

Fund Type	10 Year Average Annual Return (%)
Equity Large Cap Funds	12 - 13.5
Equity Mid Cap Funds	14 - 16
Debt Funds	6 - 8
Hybrid Funds	9 - 11

Of course, these numbers are averages—you might see funds promising 18% or more, but honestly, anything much above 15% annualized for 10 straight years is rare and often means more risk. If a fund’s return looks too good to be true, check if it involves higher volatility or funky losses in some of those years.

Here’s what you should actually check when judging your 10 year return:

• Did your fund beat its category average?
• Was it ahead of the benchmark index (like the Nifty 50 or Sensex)?
• Was the performance consistent, or did it swing wildly?

Quick tip: Don’t just hunt for the highest possible number. A steady 12-14% annualized return with fewer stomach-churning drops is usually better long term than a flashy 16% that crashes every few years. Especially if you want to sleep at night, not stare at your portfolio in panic.

Different Types of Mutual Funds: Who Wins the Race?

This is where things get interesting. In India, mutual funds come in all shapes and sizes, but if you're aiming for a solid 10 year return, you can’t ignore the big three: equity funds, debt funds, and hybrid funds.

Equity mutual funds have usually been the front runners. Over the last decade, top-performing equity schemes averaged 12-15% per year—sometimes even more for good large-cap and flexi-cap funds. These funds put most of the money in stocks, so they're more volatile, but over longer periods, they reward patience.

Now, debt funds play it safer. They mostly invest in government bonds or high-quality company debt. You won’t get the high-flying returns of equities, but 6-8% annualized over 10 years is common. The upside? Lower risk. The downside? Inflation can eat up some of those gains if you’re only in debt funds for the long haul.

Don’t forget about hybrid funds. These try to mix the best of both worlds by putting money in both stocks and bonds. Balanced advantage funds (one type of hybrid) pulled in average returns of about 9-11% annually for the last 10 years. Not too risky, not too boring.

Type of Mutual Fund	10-Year Avg. Return (Annualized)	Risk Level
Equity Funds	12-15%	High
Hybrid Funds	9-11%	Medium
Debt Funds	6-8%	Low

So who wins? If you want high growth and don’t mind some bumps, equity is your best bet. Want a smoother ride and can settle for less? Debt funds are your friends. If you just want something “in-between,” hybrids cover your bases. The real trick is knowing your comfort with risk and your long-term goals before picking a winner in the mutual funds race.

Not Just the Numbers: What Else Makes a Fund Good?

So you found a mutual fund flaunting a strong 10 year return. That’s a solid start, but you can’t just stop there. There’s plenty more that matters if you actually want your money to work for you—and not just look good on paper.

First up: consistency. One-off superstars are everywhere, but funds that perform steadily year after year? Those are gold. Check the fund's annual returns, not just its average. If it holds up during rocky years (like 2020’s COVID crash or 2022’s market wobbles), you’ve found a potential keeper.

Then, you need to look at risk-adjusted returns. Two funds both may brag about a 12% average, but one may have you losing sleep with wild swings. Look for something called the Sharpe Ratio in the factsheet—higher means you’re getting more return for the risk you’re taking. In India, a Sharpe Ratio above 1 over ten years usually means the fund isn’t just lucky—it's managed well.

Expense ratios are another dealbreaker. This is simply what you pay the fund house every year. In India, an expense ratio above 2% eats into your profits big time, especially over years. Always compare this with other similar funds—sometimes a low ratio makes an “average” fund actually a good deal long term.

And don’t underrate the fund manager’s history. A good fund today could go downhill if the star manager jumps ship. Check how long your fund’s manager has been at the helm. Anyone sticking around more than five years is worth a second look.

There’s also “AUM”—assets under management. If a fund has swollen very fast, it might have trouble delivering standout returns because it’s harder to move big money. Bigger isn't always better. Watch this metric especially with midcap or smallcap funds.

• Consistency in returns — Check for fewer wild swings
• Risk-adjusted returns (like Sharpe ratio) — More return for every bit of risk you’re taking
• Expense Ratio — Lower is better; under 2% for equity funds is pretty solid
• Fund Manager’s track record — Longer tenure usually means steadier performance
• Assets under management (AUM) — Not too tiny, not too massive, especially for smaller fund types

It’s a myth that chasing the highest mutual funds return is all you need. The real winners are those who look at the whole picture. Dig into these extra details and you’re already ahead of most investors.

Smart Investor Moves: Tips for the Next Decade

If you want to hit those solid 10 year return numbers in your mutual funds, you need more than just luck. Good investing, especially in India, is all about having a game plan and sticking to it—rain or shine. Here are some practical moves that actually work:

• Don’t try to time the market. Even top fund managers rarely get this right. If you’re constantly pulling money out when markets dip or buying only after a crazy rally, you’ll probably miss the best days. Staying invested usually beats jumping in and out.
• Prioritize SIPs (Systematic Investment Plans). This method basically lets you buy at different market levels, which helps average out your costs. According to AMFI data, nearly 60% of equity mutual fund SIP investors got double-digit annual returns over 10 years (2015-2024).
• Review, but don’t react too fast. Checking your portfolio every week just brings stress. Reviewing once or twice a year works better. Look for consistency in returns and see if the fund manager or your fund’s style has changed a lot—these are bigger red flags than a short-term slip.
• Don’t just chase past winners. Every mutual fund advertises big past numbers, but this doesn’t guarantee they’ll do it again. Look at how the fund did in tough years, not just in bull runs.
• Keep an eye on costs. Expense ratios matter a lot over a decade. Pick funds with lower fees, especially if they deliver similar long-term returns.

Fund Type	Avg 10-Year Annual Returns (2015-2024)	Common Expense Ratios
Equity Funds	12% - 15%	1.0% - 2.5%
Debt Funds	6% - 8%	0.5% - 1.5%

One thing investors often forget: stick to your risk comfort. If you can’t sleep at night when markets drop, it might be time to rethink how much you put into high-risk funds.

"The key to wealth building in mutual funds is discipline, not timing or hot tips. The most successful investors are those who stayed invested for the long haul." — Radhika Gupta, Edelweiss AMC

Set up auto-debits for your SIPs, stay patient, and keep learning. Your future self will thank you—and if you get stuck, even my cat Whiskers knows to sit tight instead of chasing every shiny object.