How to Create Rs 100 Crores with 50K SIP in Mutual Funds?

SIP in mutual funds helps investors invest in a disciplined way and avoids timing the market. While some criticise there is no advantage of investing through SIP, many experts believe that SIP helps in inculcating disciplined savings and large sum can be accumulated over a period of time. Some of the readers of our blog have been asking how to create wealth for 5 Crore and 10 Crores. A couple of readers curious to know about How to Create 100 Crores with Rs 50,000 per month SIP in mutual funds. Is this really possible, if yes what are the ways we can create such huge corpus. What are the risks one should consider to achieve this massive corpus creation through SIP mutual funds.

What is this 100 Crores goal?

While everyone would aim for 1 crore or 5 crore or 10 crores, one of our readers, Pranav would like to know how to achieve Rs 100 Crores with 50K SIP per month. While he has not indicated the timing, we are assuming it would be the maximum time frame of 25 to 30 years. It is impossible to create a such huge corpus with low investment or with low tenure.

How to Create Rs 100 Crores with 50K SIP in Mutual Funds

How much wealth one can create with 50K SIP?

Assuming the mutual funds can generate 10% to 12% annualised returns, the ideal wealth one can create with Rs 50,000 SIP is:

What returns can make Rs 100 Crores then?

If an investor invests 50K SIP per month for 30 years, the corpus that can be created is Rs 11.4 to 17.6 Crores. Let us see various scenarios on how this massive goal of Rs 100 Crores can be achieved.

1) If an investor invests 50K SIP per month for 30 years and increases SIP by 10% every year, they need to get 16.5% annualised returns to reach to Rs 100 Crores.

2) If an investor invests 50K SIP per month for 30 years and increases SIP by 15% every year, they need to get 13.2% annualised returns to reach to Rs 100 Crores. From returns perspective, it is possible while it is still aggressive, however increasing SIP by 15%, investors need to rethink if it is really possible from their side.

3) If an investor invests 50K SIP per month for 30 years and increases SIP by 20% every year, with 12% annualised returns they can reach Rs 176 Crores. They can create Rs 100 Crores goal in 27 years itself. From returns perspective, it is simply achievable, however is it really possible for investors to increase their SIP by 20% every year?

The above scenarios might not fit for all investors, hence they should check what is really possible to them.

Things to avoid to achieve such high massive goal

#1 – Avoid investing only in index funds. Since index funds can generate around 10% annualised returns, there is no way you can achieve such massive corpus creation with these index funds.

#2 –  Avoid investing in a small number of funds. Today’s top performing mutual funds can be worst performing funds in medium to long term. If you have chosen 2-3 funds and these are underperforming in the medium term, how would you achieve your goal? Hence, you should increase the count of mutual funds.

#3 – Always diversify your portfolio of mutual funds. Do you know that a balanced advantage funds generated over 15% annualised returns in the last 2 years even though the stock market has generated minimal returns? We took this as an example to tell you that diversification of portfolio is always rewarding investors in the short term, medium term and long term.

#4 – Avoid lump sum investments. Always try to invest through SIP or in case of lump sum investments, split this into 6 to 9 installments.

#5 – Higher the risk, higher the returns. I am not asking to do day trading or F&O trading. If you can take a higher risk, there are higher chances that your portfolio generates higher returns.

#6 – Increase your investment year on year to achieve larger corpus targets. Don’t invest and sit if you have such massive aggressive goal. This might not work out, especially when there is a bear market for few years.

Which mutual funds can help to create 100 Crores with 50K SIP in Mutual Funds?

The data points are taken from Moneycontrol, Valueresearch and Niftyindices platform. Since these funds aim for high returns, these are high risk too.  High risk investors only should consider this portfolio of mutual funds.

#1 – Midcap Mutual Funds

Midcap funds invests in mid cap companies which may be blue chip companies in the future.

Midcap mutual funds historically generated higher returns compared to large cap funds. If you observe Nifty Midcap 150 index, it generated 16.1% annualised returns since inception and 12% annualised returns in the last 5 years. This category of funds has underperformed in the last 1-2 years. However, we believe midcap funds can outperform in the medium to long term. 100% of active mid cap mutual funds has generated 16% to 22% annualised returns in the last 10 years. This proves right?

Below are some of the midcap funds that can help to achieve Rs 100 Crores goal. We have provided annualised returns as well as SIP returns tables.

Annualised Returns
Scheme Name 3 Yr 5 Yr 10 Yr Crisil Rank AuM (Cr)
Kotak Emerging Equity Fund 37% 15% 21% 4 25,972
Edelweiss Mid Cap Fund 37% 14% 21% 4 2,787
SBI Magnum Midcap Fund 41% 15% 21% 4 9,370
Invesco India Mid Cap Fund 32% 15% 21% 3 2,803
HDFC Mid-Cap Opportunities Fund 37% 13% 20% 4 36,912
SIP Returns
Scheme Name 3 Yr 5 Yr
10 Yr
Kotak Emerging Equity Fund 20% 21% 20%
Edelweiss Mid Cap Fund 21% 21% 19%
Invesco India Mid Cap Fund 18% 19% 18%
HDFC Mid-Cap Opportunities Fund 23% 21% 18%
SBI Magnum Midcap Fund 24% 23% 18%

#2 – Smallcap Mutual Funds

Small cap funds invest in small cap companies in India. Generally smallcap companies might grow aggressively, however slowdown in their business at a faster pace too, hence investments in these small cap stocks are high risk.

Small cap mutual funds historically generated higher returns compared to mid cap and large cap funds. Nifty Smallcap 250 index has generated 14.6% annualised returns since inception and 8% annualised returns. Even this category of funds has underperformed in the last 1-2 years. However, again like mid cap funds, even small cap funds will outperform in the medium to long term. 100% of active small cap mutual funds has generated 16% to 27% annualised returns in the last 10 years which proves these are high return funds.

Below are some of the small cap funds that can help to achieve Rs 100 Crores goal. We have provided annualised returns as well as SIP returns tables.

Annualised Returns
Scheme Name 3 Yr 5 Yr 10 Yr Crisil Rank AuM (Cr)
Nippon India Small Cap Fund 51% 18% 27% 4 26,293.50
SBI small cap fund 41% 16% 26% 3 16592
DSP Small Cap Fund 43% 13% 23% 2 9,408.99
Kotak Small Cap Fund 47% 17% 21% 3 9,230.11
Franklin India Smaller Companies Fund 45% 12% 21% 3 7,592.61
SIP Returns
Scheme Name 3 Yr 5 Yr 10 Yr
Nippon India Small Cap Fund – Direct Plan 31% 28% 24%
SBI Small Cap Fund – Direct Plan 23% 24% 23%
Kotak Small Cap Fund – Direct Plan 23% 25% 21%
DSP Small Cap Fund – Direct Plan 23% 23% 19%
Franklin India Smaller Companies Fund – Direct Plan 28% 23% 18%

#3 – Dynamic Asset Allocation Funds

All this is fine, what happens if stock markets underperform in the short term to medium term? You should have a strategy to beat such scenario also right? Stock market underperformance could be due to several reasons like pandemics like covid, negative global cues, high inflation, slow down in the Indian economy etc., One of the best ways to beat this is to invest in dynamic asset allocation mutual funds. While there are several such hybrid funds, our analysis shows that below funds are consistent performers in the medium to long term that generated 13% to 14.5% annualised returns.

Annualised Returns
Scheme Name 3 Yr 5 Yr 10 Yr Crisil Rank AuM (Cr)
HDFC Balanced Advantage Fund 30% 13% 15% 4 54,412.00
ICICI Prudential Balanced Advantage Fund 20% 10% 13% 4,584.00
SIP Returns
Scheme Name 3 Yr 5 Yr 10 Yr
HDFC Balanced Advantage Fund 21% 18% 15%
ICICI Prudential Balanced Advantage Fund 12% 12% 12%

#4 – Sector Mutual Funds

Banking, Infrastructure and IT etc. sectors have been outperforming in the medium to long term. However, investing in sector mutual funds is high risk. As an example, currently IT / Technology sector is underperforming in the last 1 year, hence there could be a down trend in such sectors in the short term. Hence, investors can have some exposure to such sector funds and should not have them as their main portfolio of funds.

Below are some of the sector funds that can help to achieve Rs 100 Crores goal. We have provided annualised returns as well as SIP returns tables.

Annualised Returns
Sector Scheme Name 3 Yr 5 Yr 10 Yr Crisil Rank AuM (Cr)
IT / Tech SBI Technology Fund 32% 20% 20% NA 2,812.00
Infra Kotak Infra Fund 42% 14% 18% 4 802.00
Banking ICICI Pru Banking and Fin Services Fund 32% 10% 16% NA 6,313.00
SIP Returns
Funds Scheme Name 3 Yr 5 Yr 10 Yr
IT / Tech SBI Technology Fund 14% 20% 18%
Infra Kotak Infra Fund 31% 24% 18%
Banking ICICI Pru Banking and Fin Services Fund 18% 14% 15%

Have you liked our tips and analysis? Then share it on your Facebook, Twitter, Telegram and other social media which might be useful to your friends too.

Suresh KP

16 comments

  1. Sir, I am 39 years old and aspire to create a corpus of 12-15 crores in 20 years via SIP route. Have a moderate risk appetite and can invest 70000 per month with a ability to invest 5lacs in lumpsum to begin.

    1. Jagmohan, Stock markets are at peak, hence I would not recommend you to invest lumpsum at this moment. Pls invest in respective liquid funds and do STP for 6 to 9 months to equity funds. Since you are moderate risk investor, invest in largecap funds and balance advantage funds

      1) Invest in HDFC liquid fund in lumpsum – Do STP for 6m to 9months into HDFC Balanced Advantage Fund
      2) Invest in Nippon liquid fund in lumpsum – Do STP for 6m to 9months into Nippon Largecap fund or
      Invest in Mire Asset Liquid fund in lumpsum – Do STP for 6m to 9months into Mirae Asset Largecap fund

      The above are just examples, you can invest in respective category funds.

  2. My age is 42 years.I am planning to invest a monthly sip of10k regularly for 15years from now.I have kind of medium to high risk range risk appetite.Can you please suggest what kind of portfolio should I invest to create a good corpus .

    1. Hello Raghuram, If you are moderate to high risk investor, you can invest in largecap, flexicap, midcap and smallcap funds (4 funds). you can look at these funds. I am personally investing in majority of these funds.

      1) Largecap – Nippon India Largecap Fund or SBI bluechip fund
      2) Flexicap fund – PPFAS Flexicap Fund or HDFC Flexicap fund
      3) Midcap fund – Motilal Oswal Midcap fund or Quant midcap fund
      4) Smallcap fund – Nippon India smallcap fund or HDFC small cap opps fund

  3. Sir,
    I have an corpus of 5 lakhs is maturing in oct. 2023. Pls. Advise mutual fund in SIP for atleast 5-10 years. My age is 58.
    Thankyou

Leave a Reply

Your email address will not be published. Required fields are marked *