Top 5 diversified equity funds based on 10-year returns: Nippon India Small Cap Fund leads with over 21% return

Investors looking to build long-term wealth for goals such as retirement, a child's education or financial security can explore diversified equity mutual funds. These schemes invest across large-cap, mid-cap and small-cap companies from multiple sectors and industries, depending on their investment mandate.

By combining the growth potential of equities with professional fund management and diversification, they have the ability to generate substantial wealth over long investment horizons, say 10 years.

Based on 10-year CAGR, Nippon India Small Cap Fund emerged as the best-performing diversified equity scheme.

Here's a look at the top five diversified equity funds based on 10-year returns and how much wealth they have created for investors.

Which are the top 5 equity funds by 10-year returns?

Nippon India Small Cap Fund

Among all diversified equity funds, Nippon India Small Cap Fund has delivered the highest 10-year CAGR of 21.81%. The scheme has 72.69% of its assets invested in small-cap stocks, with the remaining allocation spread across mid-cap and large-cap companies.

If you had invested ₹1 lakh into the fund 10 years ago and remained invested through market ups and downs, that investment would now be worth ₹7.19 lakh. This is more than seven times the original amount.

Quant Small Cap Fund

The second-best performer is Quant Small Cap Fund, which generated a 21.03% return over the past decade. The fund has 71.03% of its assets invested in small-cap stocks.

A ₹1 lakh investment made a decade ago would have grown to ₹6.74 lakh today.

Quant ELSS Tax Saver Fund

Quant ELSS Tax Saver Fund secured the third spot with 10-year returns of 20.61%. The fund has 77.66% of its portfolio invested in large-cap stocks.

Besides offering equity exposure, ELSS funds also provide tax deductions of up to ₹1.5 lakh under Section 80C for taxpayers opting for the old tax regime. An investment of ₹1 lakh in this fund 10 years ago would have appreciated to ₹6.51 lakh today.

Invesco India Mid Cap Fund

The list also features Invesco India Mid Cap Fund, which generated a 20.42% return over the same period. The scheme has 64.90% of its assets invested in mid-cap stocks, focusing on companies that are relatively more established than small-cap firms.

A ₹1 lakh investment in the fund 10 years ago would now be worth ₹6.41 lakh today.

Quant Flexi Cap Fund

Last in the list is Quant Flexi Cap Fund with 10-year returns of 20.37%. Flexi-cap funds have the flexibility to invest across large-cap, mid-cap and small-cap stocks, allowing fund managers to shift allocations based on market opportunities.

The fund has 77.94% of its assets in large-cap stocks, 15.68% in mid-cap stocks and 6.38% in small-cap stocks. A ₹1 lakh investment in the scheme would have grown to ₹6.39 over the past decade.

Based on this data, Quant Mutual Fund dominates the list, with three of the top five best-performing diversified equity schemes over the last decade.

Disclaimer: This is purely for educational/ informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.