Mutual Fund Calculator: Monthly SIP Required To Accumulate A Corpus of Rs 50 Cr In 30 years?

Mutual investments are subject to market risk but on the other side are the most popular investment option for long term investors. When investing in mutual funds, investors should take into account the fund performance, net asset value, performance of the asset management company (AMC), expense ratio, exit load, and AUM (assets under management). Here we have taken an example of monthly SIP required to accumulate a corpus of Rs 50 Cr In 30 years, and to clear this doubt we have consulted various financial advisors and analysts and have piled up their answers below.

Gautam Kalia, Senior VP and Head Super Investor at Sharekhan by BNP Paribas

To create a corpus of Rs.50 crs in the next 30 years, investors need to have a monthly SIP of Rs.1,43,000 (assuming returns of 12% p.a.).

If investors can increase their SIP amounts by 10% every year, then they can start monthly SIPs at Rs.60,500 instead (assuming returns of 12% p.a.).

Given below is the list of Funds we Like for a long term SIP portfolio. Scheme shortlisting and selection is dynamic so obviously investors are required to review their portfolios once every 6 months.

Suman Bannerjee, CIO, Hedonova

In the given example:

Rate of return: 12% per year. This indicates the expected annual growth rate of the investment.

Number of years: 30 years. This is the investment duration or the time period over which the investment will be made.

Annual step-up: 10%. This means that the monthly investment amount will increase by 10% every year.

Monthly investment: Rs 60,250. This is the initial monthly SIP amount that will be invested.

Based on these parameters, you have chosen to invest Rs 60,250 per month for a period of 30 years with an annual rate of return of 12%. Additionally, you have opted for an annual step-up of 10%, which means your monthly investment will increase by 10% every year.

Mutuals fund suggestions:

HDFC Index Fund - S&P BSE SENSEX Plan

ICICI Prudential FMCG - Growth

Aashika Jain, Financial Expert and Editor, Forbes Advisor

Systematically investing money in the stock market is among the safest ways to invest with the added benefits of a fair degree of stability and possible tax rebates. To be able to build a corpus of INR 50 cr in 30 years, they need to simply start with a base investment of INR 56,000 per month. If we look at the average annual return of mutual funds and understand an average of 12.5% returns to be an achievable target year-on-year, a top-up annual increase of 10% per year is the ideal plan to achieve your target of INR 50 cr.

Some of the best-performing SIP mutual fund across categories to be considered include:

1. Quant Tax Plan - Direct Plan
2. Canara Robeco BlueChip Equity Fund - Direct Plan
3. Quant Large and Mid Cap Fund - Direct
4. PGIM India Midcap Opportunities Fund - Direct Plan
5. Quant Small Cap Fund - Direct Plan

Satyen Kothari, the founder and CEO of Cube Wealth

To accumulate a corpus of Rs 50 Crore in 30 years, an approximate monthly SIP of Rs 1.6 Lakhs would be required. It's important to note that the suggested mutual funds are not sacrosanct and may change multiple times over the course of 30 years. However, sticking to the asset class while being open to changing funds or fund managers can be a prudent approach.

Here are a few mutual fund options that could be considered:

HDFC Top 100: This fund focuses on investing in top 100 companies based on market capitalization. It aims to provide long-term capital appreciation by investing across sectors.

Quant Active Fund: This fund follows a quantitative approach to identify investment opportunities. It uses a combination of statistical models and algorithms to make investment decisions and aims for capital appreciation over the long term.

Nippon India Growth Fund: This fund aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related securities of companies across market capitalization.

Canara Robeco Small Cap: This fund primarily invests in small-cap stocks, aiming for long-term capital appreciation by identifying opportunities in relatively smaller companies with growth potential.

It's important to conduct thorough research and consider factors such as past performance, fund management, expense ratio, and risk profile before making any investment decisions. Regularly reviewing and rebalancing the portfolio based on changing market dynamics is also advisable to ensure alignment with investment goals over the long term.

Pamarty Venkataramana is an International Corporate Lawyer New Delhi India. Chief of PVR Global Laws

PVR : To calculate the monthly SIP required to accumulate a corpus of Rs 50 crore in 30 years, we need to make a few assumptions. The expected rate of return on the mutual funds is an essential factor for the calculation. Let's assume an average annual return of 10% for this example.

Using a financial calculator or an online calculator, we can determine the monthly SIP amount. Here's the calculation:

Future Value (FV): Rs 50 crore Number of years (N): 30 Rate of return (R): 10% per annum
Using the formula: FV = P * [(1 + R)^N - 1] / R Rs 50 crore = P * [(1 + 10%)^30 - 1] / 10% P = Rs 2,689.28 (approx.)
So, to accumulate a corpus of Rs 50 crore in 30 years, you would need to invest approximately Rs 2,689.28 per month through a SIP in mutual funds with an average annual return of 10%.

Please note that this calculation is a rough estimate and does not account for factors such as inflation, taxes, and changes in the rate of return. It's always recommended to consult with a financial advisor or use a professional mutual fund calculator for more accurate results.

As for suggesting specific mutual funds, it's important to consider your financial goals, risk tolerance, and investment preferences before making any investment decisions. Here are a few well-known mutual funds that you may consider:

HDFC Equity Fund

SBI Bluechip Fund

ICICI Prudential Bluechip Fund

Axis Long Term Equity Fund (ELSS)

Mirae Asset Large Cap Fund

Aditya Birla Sun Life Frontline Equity Fund

Kotak Standard Multicap Fund

Please note that mutual fund investments are subject to market risks, and past performance is not indicative of future results.

Himani Chaudhary, financial advisor

To generate a corpus of 50cr in 30 yrs is difficult but its possible with a monthly SIP of around ₹25,000. Since every year our income also increases, this goal can be achieved only by increasing some % of the annual SIP amount. So fir this case, the investor would have to increase yearly SIPs by 15% every year for the next 30 years to gain 50cr.

Why? Because historically Nifty 50 on an average has given 12% CAGR. With the assumption that it will continue to generate these returns in the future, this goal is achievable.

To get 12% returns provided by Nifty50, investor can start investing in a Nifty50 index fund which has low expense ratio and low tracking error.

Some of them are:

ICICI Prudential Nifty50 Index Fund

HDFC Index Fund Nifty50 Plan

UTI Nifty 50 Index Fund

However its best to invest not on the basis of money goal but on the basis of life events like marriage, retirement etc and invest as per your risk appetite.

Shavir Bansal, financial advisor

Achieving a corpus of ₹50 crores in 30 years is a herculean goal. To accomplish this, you'll need to strategically allocate your funds in funds based on your objectives, time horizon, and risk tolerance. Given the long-term nature of your investment, it is advisable to allocate a majority of your funds to equity funds. Assuming an average compounded return of 12% per year, with a 10% annual increase, you would need to invest ₹36,000 per month to reach a corpus of ₹50 crores in 30 years. I would recommend taking a slightly higher level of risk and allocating 30-35% of your funds to small-cap/mid-cap funds, an equal proportion to large-cap funds, and 15-20% to flexi-cap funds. The remaining 10-15% can be allocated to a combination of debt and gold funds. While it is challenging to recommend specific funds that would suit everyone's needs, here are some notable options: Canara Robeco BlueChip for large-cap funds, PGIM India Midcap for mid-cap funds, Parag Parikh Flexi Cap for flexi-cap funds, and Quant Small Cap for small-cap funds.

Udayan an IRDAI-registered insurance advisor, a Mutual Fund Distributor

An 80,000/month SIP with an annual step-up of 10% would grow to around 50 lakhs in 30 years, assuming a 10% annual return. If a 10% annual step-up is a lot, then with a 5% step-up with all other parameters being the same, you'd need a 1.4 lac/month SIP. If you have a long-term investment horizon of 30 years, you can have a higher allocation of equities.

I would recommend a portfolio with the following mix: 40% of the money in the Navi Nifty Index Fund OR the ICICI Prudential S&P BSE Sensex Index Fund, 20% each in PGIM India Midcap Opportunities Fund and Mirae Asset Midcap Fund, and 10% each in Nippon India Small Cap Fund and Canara Robeco Small Cap Fund. I prefer large-cap exposure through index funds that have a low expense ratio and a low tracking error.

For mid and small caps, I like to have 2 funds each with a low overlap and a high 3-year rolling return. If you're new to investing I would suggest adding a 25% exposure to a bond fund - either the ICICI Prudential or HDFC Corporate Bond Fund. The remaining 75% of equity allocation can be divided into the above allocation.

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.