How much mutual fund SIP should you make to accumulate ₹3 Cr in 20 years?
Mutual funds, one of the best and most used forms of long-term investment, have consistently proven superior performance in terms of returns. However, to build wealth over a long period of 20 or more years, conservative investors should consider investing in Equity large-cap Fund or Equity index funds. “For an individual with a conservative risk profile who plans to accumulate ₹3 Crores over a period of 20 years, it is suggested to invest in Equity Large cap funds which invest a larger proportion of their corpus in companies with large market capitalization or Equity Index funds where a portfolio of stocks designed to mimic the composition and performance of a financial market index. Let's say, if an individual plan to accumulate ₹3 Crores over the tenure of 20 years, assuming the fund generates an annualized CAGR of 12%, then the individual needs to start a SIP of around ₹30,000 per month for 20 years in order to generate the required corpus,” said CA Manish P Hingar. Please note that the Large cap mutual fund category has delivered a CAGR of 13.15% in the last 10 years, and in the same period S&P BSE 100 TRI Index has delivered a CAGR of 13.28% making exposure to such schemes ideal for investors with conservative risk profile seeking to build wealth over a long period of time, said CA Manish P Hingar.
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