How many SIPs are required to accumulate a corpus of ₹20 crore in 20 years?

Santosh Navalani, COO, ET Money

to create a corpus of 20 crores in 20 years, one person needs to invest 2 lakh every month through SIP or 2,00,200 to be precise. This is possible if investors earn 12% compound annual growth rate (CAGR) on their investments. For this, investors can look at Nifty 50 index funds with a track record of 5-7 years and low tracking error. If we look at the last 20 years CAGR of Nifty 50 ending March 31, 2023, it is 16.91%.

With index funds, you do not need to worry about the performance of your plan as long as the tracking error is low. You do not need to spend extensive time researching and choosing the best fund and hoping that it will perform well in the future. But it is better that the investor takes a portfolio approach to investment and follows asset allocation. Instead of investing all the money in equity, investors can decide asset allocation between equity, debt and gold and try to maintain it by rebalancing at least once a year.

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

It is always good to do investment planning at the early stage of life as it helps in building a good corpus with less amount of investment. To build a corpus of Rs 20 crore in 20 years, investors should start an SIP of Rs 2,02,000 assuming a return of 12% per annum. If the investor is ready to increase the SIP amount every year, he can build this corpus by starting SIP from Rs 1,07,000 per month and increasing this SIP amount by 10% every year.

Lakshmi Iyer, CEO-Investments & Strategy, Kotak Investment Advisors Ltd.

Assuming 12% compounding on average, 2 lakh is needed every month for 20 crore corpus in 20 years. The amount may increase or decrease depending on the return estimate. Markets do not offer linear returns, hence the long term is important in the markets. For this, opt for flexi cap or multi cap funds.

Amit Gupta, MD, SAG Infotech

You should always do mutual fund asset allocation as per your goals, investment horizon and risk profile. Since you are planning to invest for the long term, you may want to invest in Equity Mutual Funds. Equity investors with a moderate risk appetite may find multi-cap mutual funds interesting. Sector funds (utilities, healthcare and real estate) were given a 5% allocation because they tend to focus their efforts on a specific type of firm, which increases risk.

In 20 years, if you invest Rs. 70 lakhs and get 12% annual returns, you can have a corpus of Rs. 6.75 crores and not demanding returns in any way i.e. Rs 20 crores. However, it is important to remember that this is only a hypothetical situation, and actual results may differ. A corpus is money set aside or invested with a specific goal in mind. If you have invested Rs. then that amount will remain in your account after 20 years. 70 lakhs at 12% annual return.

Correct definition of risk and selection of strategies that work with it are essential. For example, if you have a low risk appetite, you should invest mostly in large-cap funds. If you have a moderate risk appetite, then you can invest in flexi-cap mutual funds. With the help of mid-cap, small-cap, sector and theme funds, you can invest in high risk projects. However, you have to decide how much of your money will go towards these programs.

Still some mutual funds can help in achieving targeted returns like:

1. Investments by Aditya Birla Sun Life Mutual Fund.

2. ICICI Prudential India Opportunities Fund

3. ICICI Prudential Midcap Fund – IDCW.

4. ICICI Prudential Midcap Fund – Growth.

Ankush Bali, Financial Portfolio Manager – PGDBF | Limra | MDRT | amphi registered

If you invest Rs 2.2 lakh every month, a corpus of Rs 20 crore can be created in 20 years. Or you can extend the deadline. If want 20 cr or corpus then invest 1.2 lac for 25 years. Or 70k @ 12% for 30 years in all scenarios. If you are going by sip step up then it becomes even less.