Mutual fund calculator: Monthly SIP required to accumulate a corpus of ₹50 Cr in 20 years

Holding units for as long as you can to take advantage of compounding and create enormous wealth is another important aspect of mutual funds. This is in addition to investing in a certain fund type depending on your risk profile and objectives. Additionally, mutual funds are one of the low initial investment options with the added advantages of rupee cost averaging and convenience of equity investments thanks to SIPs, which start at just ₹100. Here we have taken an example of how much a beginner can make SIP to accumulate a corpus of ₹50 Cr in 20 years. Let’s take suggestions from various industry experts.

Santosh Navlani,COO, ET Money

It’s good that you have given yourself 20 years to accumulate a sizable corpus like ₹50 crore. Assuming you earn a reasonable 12% average annual return, you will need a monthly SIP of nearly ₹5,01,000.If this looks like a massive monthly outflow, there’s an alternative. You can start with a smaller amount, and as your income rises, you can step up your investments every year.Let’s look at how numbers stack up when you give a hike to your SIPs every year.

Assuming you increase your investments by 10% every year, you will need a monthly SIP of around ₹2,20,000 to amass ₹50 crore. If you can gradually increase your investment limit, you will need to start with less than half of what you need in a normal SIP. Now, let’s look beyond numbers and calculators. In such a long investment journey, curtailing risk is more important than chasing returns. You will accumulate wealth only if you remain in the market. And that will happen only if you have the confidence that your investments won’t get wiped out due to a sudden market correction.

To get this confidence to stay invested, it is best to diversify your investments across multiple asset classes like equity, debt, and gold. This will lower the impact of a sudden correction in the market, and you will have the peace of mind to continue your investments for as long as 20 years.

A simple strategy can be to pick a couple of index funds from the large-cap and mid-cap universe. Make sure you invest some part in fixed-income options and gold.

S. Ravi, Promoter & Managing Partner, Ravi Rajan & Co. LLP

To accumulate a corpus of ₹50 Cr in 20 years, investors must adopt a disciplined and strategic approach to investing. This target is ambitious but achievable with the right investment plan and a clear understanding of the market dynamics.

The monthly Systematic Investment Plan (SIP) required to reach this target would be approximately ₹11 lakhs. This investment would require a high level of financial stability and commitment. However, for those with significant disposable income, this investment goal may be worth pursuing.

When considering a SIP, investors should not only look at the potential returns but also consider the risk involved. A diversified portfolio is essential to minimize risk and optimize returns. By investing in a variety of mutual funds, investors can manage market fluctuations and achieve their financial objectives.

Several Indian mutual funds have a proven track record of generating high returns for investors. HDFC Top 100 Fund, SBI Blue-chip Fund, Axis Blue-chip Fund, ICICI Prudential Blue-chip Fund, and Franklin India Blue-chip Fund are among the top-performing funds that investors should consider.

Before investing in mutual funds, investors must consult with a financial adviser. A professional financial adviser can help evaluate the investor's risk profile and recommend a tailored investment plan. Investors should also conduct thorough research and understand the fund's objectives and past performance.

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

The Investor should start SIP of Rs.5,05,500 per month to create a corpus of Rs.50Crs in next 20 years assuming return of 12%pa. If the investor is ready to step up SIP amount by 10% every year then he can achieve this corpus by starting the SIP of Rs.2,67,500 per month.

Rinju Abraham, Vice President, Scripbox

If an investor has a target corpus of ₹50 Crs and a time horizon of 20 years, I would recommend that he goes in with a 100% allocation to Indian Equities. While historically long-term returns for Indian Equities have been close to 13% or so, I would recommend a small moderation of return expectations going forward.

Assuming that the Returns will hover around 10% over the long run, an investor with a monthly SIP of ₹6,50,000 will be able to achieve a 50 Crore corpus over a 20 year investment period. Alternatively, someone starting now with a monthly SIP of ₹3,75,000 and committing to a yearly step-up of 8% should be able to achieve the same corpus over a 20 year investment period.

While one commits to such an endeavor, one should make sure that there is a periodic review of the investments and goals. This is crucial to ensure that the investment objectives are met.

Please note, the taxation element has not been considered in this computation.

Ishkaran Chhabra- Founding Partner, Centricity

Many investors dream of accumulating a corpus of ₹50 Cr, but they often don't know where to start. It is believed that disciplined investing combined with the power of compounding can help investors achieve their long-term financial goals. To accumulate this corpus in 20 years through monthly SIP, investors would need to invest approximately ₹5 lakh per month, assuming an average annual return of 12%.

Investors looking to achieve this goal should consider investing in large-cap funds like SBI Bluechip Fund, HDFC Top 100 Fund, and ICICI Prudential Bluechip Fund, as well as multi-cap funds like ICICI Large and Midcap Fund and HDFC Flexi Cap Fund. These funds have a proven track record of delivering consistent returns over the long term and offer a diversified portfolio of high-quality stocks across different market caps and sectors.

It's important to remember that investing is a long-term discipline, and market fluctuations should not deter investors from staying invested. By staying disciplined, diversifying their portfolio, and focusing on their long-term financial goals, investors can achieve their dreams of financial independence.

It is advised that investors consult with a financial advisor to determine the investment strategy that best suits their individual goals, risk tolerance, and financial situation.

Misbah Baxamusa- CEO of NJ Wealth

Historically, equity funds have delivered attractive returns over the past 20 years. In our internal study of such 52 funds, the average SIP returns stood at 14.18% for 20 years as on 30th April 2023. Now, assuming a reasonable return of 12%, the common man aspiring to accumulate 5 crores in 20 years would need to do a SIP of Rs.54,400 (rounded). 

However, if one cannot start a fixed SIP of this amount today, one can opt for a step-up or top-up SIP where you increase your SIP savings every year. In our target for Rs.5 crore, if one registers the SIP with a Top-up of Rs.5,000 every year, the SIP amount required would be just Rs.24,300 (rounded) for the first year. One can multiply these figures by 10 for the 50 crore target amount.

Gurpreet Sidana, Director & COO, Religare Broking Ltd.

SIP investments are a potent tool for accumulating wealth in the mid to long term. Indeed we have witnessed outstanding participation by retail & HNI investors post pandemic. According to AMFI data, equity-oriented schemes derived 89% of their assets from individual investors (Retail + HNI). Thus, SIPs played a crucial role in mushrooming household savings in the country.

When we talk about a time horizon of 20 years, the investor will witness multiple moderate to major cycles of market corrections. The investor should not depend on a single SIP strategy, when eying a massive corpus of ₹50 crore. Rather, it is recommended to start an SIP of minimum ₹2 lakh in flexicap, midcap and small cap equity funds and diligently step up monthly SIPs by 10-15% annually. Further the investor should always be open for lumpsum investment opportunities after major market corrections each year. It is advisable to review and rebalance your portfolio with the help of a certified professional every three years.

Shavir Bansal aka BeKifaayti- Finance Expert and Digital Content Creator

Creating a Corpus of ₹50 Crores in 20 Years is a Steep Target. You will need to allocate Mutual Funds in accordance with your Objectives, Horizon and Risk taking appetite. Since 20 years is a fairly long term, I would recommend allocating a majority in Equity Funds. Assuming an average of 13% compounded, with annual step up of 10% - ₹1.5 Lacs per month (1,50,367 to be precise) is needed for a ₹50 Crore Corpus in 20 years. 

If this sounds a bit unrealistic to you, you can always increase the tenure of your investments. If your risk appetite allows - I would recommend allocating 30-35% in Small Cap/ Mid Cap Fund, equal proportion in Large Cap Fund and 15-20% in Flexi Cap Funds. Balance 10-15% can be allocated to Debt + Gold. Though it’s very difficult to recommend specific funds which will suit everyone’s needs, but here are some of the good ones Large Cap : Canara Robeco BlueChip Mid Cap : PGIM India Midcap Flexi Cap : Parag Parikh Flexi Cap Small Cap : Quant Small Cap

Himani Chaudhary, finance creator

To generate a corpus of ₹50 Cr. in 20 years, a monthly SIP of ₹5 Lacs is required, assuming a 12% CAGR.

This can be achieved by investing in a Nifty50 Index fund as it has given similar returns in last 10 years.

But surely, income also increases every year, so if you can increase your annual SIP by 7%, the goal can be achieved by starting SIP of ₹4.5 Lacs (assuming average inflation rate of 5%).

Ideally any index fund with a low tracking error and low expense ratio will be beneficial.

Few of them are:

ICICI Prudential Nifty 50 Index Fund

HDFC Index fund Nifty50 Plan

UTI Nifty 50 Index Fund

However its better to invest in funds based on the goal ex. Marriage, Retirement etc. And then look at the investment period. Then based on your risk appetite start investing by creating a financial plan.

Aishwarya Jain, Wealth Advisor and a Senior Relationship Manager

If you want to achieve your wealth goals, know your risk appetite and invest accordingly. For conservative investors seeking up to 12% p.a. returns, a monthly SIP of approximately 5L can help you accumulate 50Crs. But if you're an aggressive investor expecting returns above 12% p.a., a monthly SIP of 3.34L p.a. (@15% p.a.) will be required. 

Choose wisely and invest smartly for a secure financial future. Few of the suggested mutual funds are: Quant Active Fund, ICICI Prudential Multi Asset Fund, HDFC Balanced Advantage Fund and SBI Focused Equity.

Suman Bannerjee, CIO, Hedonova

Assuming an annual return of 12% (historical average of the stock market in India), you would need to invest approximately ₹5,00,000 per month to accumulate a corpus of ₹50 crore in 20 years.

Of course, this is a large amount of money, and it may not be feasible for most investors. Here are a few mutual funds one may want to consider:

Axis Bluechip Fund

HDFC Balanced Advantage Fund

SBI Focused Equity Fund

ICICI Prudential Bluechip Fund

Mirae Asset Large Cap Fund

CA Manish Mishra, Virtual CFO

To calculate the monthly SIP required to accumulate a corpus of ₹50 Cr in 20 years, accounting for an inflation rate of 6%, we need to adjust the future value by using the concept of present value. Assuming an annual rate of return of 12% and an inflation rate of 6%, the monthly SIP required would be:

Present Value = Future Value / ((1 + Inflation Rate)^(Number of Years))

Present Value = 50,00,00,00 / ((1 + 0.06)^20)

Present Value = ₹14,84,71,225.12

Adjusted Future Value = Present Value x (1 + Annual Rate of Return/12)^(Number of Years x 12)

Adjusted Future Value = 14,84,71,225.12 x (1 + 0.12/12)^(20 x 12)

Adjusted Future Value = ₹82,22,10,738.25

SIP = Adjusted Future Value / (((1 + (Annual Rate of Return/12))^(Number of Years x 12)) - 1) x (1 + Inflation Rate/12)

SIP = 82,22,10,738.25 / (((1 + 0.12/12)^(20 x 12)) - 1) x (1 + 0.06/12)

SIP = ₹10,63,413.81

Therefore, to accumulate a corpus of ₹50 Cr in 20 years, accounting for an inflation rate of 6% and an annual rate of return of 12%, you would need to invest a monthly SIP of ₹10,63,413.81.

A balanced portfolio mix of mutual funds, direct equity, and alternative investments in the ratio of 60:30:10 (Mutual Funds:Direct Equity:Alternative Investments) can be considered to achieve the target of accumulating a corpus of ₹50 Cr in 20 years with an annual rate of return of 12% and an inflation rate of 6%.

Shreyas Kudalkar, MD of Kings Nidhi

Suggested mutual funds to achieve the target are:

Large cap

1)Mirae Asset Large Cap Fund

2)Canara Robeco Bluechip Equity Fund

3)ICICI Prudential Bluechip Fund

4)Axis Bluechip Fund

Mid Cap

1) Motilal Oswal Midcap Fund

2) Axis Midcap Fund

3) Mirae Asset Midcap Fund