Mutual funds do not provide guaranteed returns and their performance depends on market conditions. According to wealth advisors, equity mutual funds are best for investors planning to grow their money. Analysts believe long-term investors should go for mutual funds be it in the form of SIP or lumpsum to achieve their financial goals. The sooner you start investing, the earlier you will be able to compound your money and help you accumulate sufficient wealth.
Amit Gupta, MD, SAG Infotech says, it is important to understand that all mutual funds carry a degree of risk, including equity mutual funds, which do not offer predictable returns like bank deposits. Instead, returns are influenced by stock market conditions and can be either favourable or unfavourable. While over a long-term period, average returns of 12-15% can be expected, it is not possible to achieve these returns every year or in short periods of time.
MF plans that can help an investor achieve ₹5 crore corpus in 15 years
On mutual fund plans that can help an investor achieve a ₹5 crore corpus in 15 years, Pankaj Mathpal, MD & CEO at Optima Money Managers listed out the following schemes:
1] ICICI Prudential Large & Midcap Fund;
2] Aditya Birla Sun Life Multi-cap Fund; and
3] Nippon India Flexi Cap Fund.
Mutual fund calculator
So, if an investor invests ₹50 lakh lump sum in mutual fund for 15 years, then assuming a 15 per cent annual return, one will get ₹4,06,85,308 crore, suggests the SBI Mutual Fund calculator.
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How the 15 X 15 X 15 rule of mutual funds can help you become rich
Mutual funds investors should be aware of various MF rules while investing and one of them is the 15 X 15 X 15 rule of mutual funds. This rule says that if an investor is invested for 15 years, one can expect to get a ₹1 crore maturity amount as the investment would yield around 15 per cent per annum.
So, if we combine ₹4,06,85,308 crore with ₹1 crore maturity amount for staying invested for 15 years, then the total comes to ₹5 crores. So, your ₹50 lakh lump sum amount will turn into ₹5 crore.
Mutual funds to invest ₹50 lakh for five years
For those looking to invest for five years and willing to assume some risk, balanced advantage funds or dynamic asset allocation funds can be suitable options. These funds adjust their equity allocation based on the market’s valuations and can be used for a five-year investment period
On a lump sum mutual fund with a five-year horizon, Amit Gupta listed out the following SIP plans:
1) Axis Nifty 100 Index Fund Regular – Growth
2)Axis Nifty 50 Index Fund Regular – Growth
3)ICICI Prudential BHARAT 22 FOF Direct-Growth
4)Quant-Focused Fund Direct-Growth
5)Nippon India Large Cap Fund Direct-Growth
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