Mutual Fund Calculator: How Much SIP Required To Accumulate A Corpus of Rs 15 Cr By Age of 50 Years?

Mutual fund investments have a track record of performing well as long-term bets for at least five years, which will not only help you reach your long-term objectives with returns that outperform inflation but also enable you to diversify your investment. versatility to invest in smaller amounts starting at Rs 500, lower expenses, the shortest lock-in period of only 3 years, a lower rate of tax on gains, well-regulated by SEBI, and investment in ELSS up to Rs 1,50,000 is eligible for a reduction in taxation under section 80C of the Income Tax Act of 1961. Here, we've used the example of how much SIP is needed to accumulate a corpus of Rs. 15 crore by the age of 50, assuming that the investor is now 25 years old. Let's take experts' views on this.

Tanvi Kanchan, Head - Corporate Strategy, Anand Rathi Shares and Stock Brokers

The current Financial year started with a lot of positive notes. On a medium-term perspective, the outlook of equity market depends primarily on three factors, fundamentals both macro and corporate, liquidity flows towards the equity market both from domestic and foreign sources and the level of equity valuations. Currently India's macroeconomic fundamentals are in reasonable health and corporate fundamentals are improving especially in terms of corporate margins.

The resilience of domestic flows towards the equity market has been continuing and post the major outflows we witnessed last year, the cross-border portfolio flows towards the Indian equity market has resumed. Most valuation multiples for the Indian equity market remain below the averages for the last five years and slightly above the longer period averages. In view of all these factors, the medium-term to long term outlook for the Indian equity market continues to remain positive.

Mutual funds are the most efficient and easy way to invest in the Indian equities and start generating and creating good long term wealth proposition. Having a good allocation in Large cap, mid cap and small cap is prudent. For instance we know small cap have a higher return generation capabilities, however they come with a much higher risk associated to it.

The ideal market cap allocation in a good mutual fund portfolio would be 50% in Large cap, 20% in Mid cap and 30% in Small Cap. This allocation strategy is designed to achieve the targeted return, keep the risk parameters in check and have a good diversification across sectors.

Now assuming a base expected rate of return of 15% p.a., if we start with a SIP of 45,675 on a monthly basis, we would reach a portfolio size of Rs.15 crs by end of 25 years! Here our investment value would be ~Rs.1,37crs and the total interest earned would be at Rs.13.63crs!

A few mutual funds that investors can consider is Quant active fund, Canara Robeco flexi cap fund, ICICI Pru Focused fund, Kotak emerging equity fund.

Shruti Jain, CSO, Arihant Capital

To accumulate a corpus of Rs 15 Cr by the age of 50 years, with an assumed age of 25 years, a monthly SIP of Rs 79,836 is required. This calculation considers an expected rate of return of 12% and does not account for the impact of inflation. It is important to note that this is a simplified calculation and actual investment decisions should be made after considering individual financial goals.

Satyen Kothari, the founder and CEO of Cube Wealth

To accumulate a corpus of Rs 15 crore by the age of 50, assuming an investor's age of 25, the monthly SIP (Systematic Investment Plan) amount required depends on various factors such as the expected rate of return and the investment duration. Considering a conservative average annual return of 12%, the monthly SIP required would be around Rs 80,000 over the 25-year investment period. However, it's important to consult with a financial advisor and consider one's risk tolerance, income, and investment goals to determine a suitable SIP amount for achieving the desired corpus.

Nanavath Bhupal Naik, MD , Shares Bazaar

Systematic funding plans (SIPs) have emerged as a reliable investment approach for pursuing long-term financial goals. For individuals looking to build up a corpus like Rs 15 Crores by age 50, disciplined month-to-month SIPs can pave the way to financial achievement.

Let's see an example of a 25-year-antique investor aiming to attain this ambitious goal. With a time horizon of 25 years, a month-to-month SIP amount wishes to be calculated. If an annual return of 12%, the investor should intend for an approximate SIP of Rs 1,07,350.

Various mutual funds with a full track document can aid in attaining this goal. HDFC Mid-Cap Opportunities Fund and Axis Long-Term Equity Fund may be considered for competitive buyers.

Remember, it is essential to talk regarding economic consultants to tailor the funding approach according to one's risk profile and monetary targets. Regular monitoring and changes may be required to align the SIP amount with changing market conditions.

Pamarty Venkataraman International Corporate lawyer New Delhi

To calculate the monthly SIP required to accumulate a corpus of Rs 15 crore by the age of 50, we need to consider a few factors such as the expected rate of return and the investment duration. Let's assume a rate of return of 10% per annum for this example.
The investment duration is the difference between the target age and the investor's current age. In this case, it would be 50 - 25 = 25 years.

Using the future value formula for a monthly SIP:

FV = P * [(1 + r)^n - 1] / r
Where: FV = Future Value (Rs 15 crore) P = Monthly SIP amount r = Rate of return per period (10% / 12) n = Number of periods (25 * 12)

Substituting the values, the formula becomes:

15,00,00,000 = P * [(1 + 0.10/12)^(25*12) - 1] / (0.10/12)

Simplifying the equation, we can solve for P:

P = 15,00,00,000 * (0.10/12) / [(1 + 0.10/12)^(25*12) - 1]

Using a financial calculator or spreadsheet software, we find that the monthly SIP required to accumulate a corpus of Rs 15 crore by the age of 50, assuming a 10% annual return, is approximately Rs 52,980.

Now, regarding mutual fund suggestions, it's essential to consider that mutual fund selection should align with an investor's risk profile, financial goals, and time horizon. Without these details, it's challenging to provide specific recommendations. However, some popular mutual fund categories for long-term wealth accumulation include large-cap equity funds, diversified equity funds, and index funds.

Disclaimer

We do not recommend investment decisions and only provide information by consulting industry analysts. Neither the author, nor Greynium Information Technologies, nor the brokerage firm should be held responsible for losses based on the above article. Please consult a professional advisor before investing.