SIP calculator step-up: Following the US Supreme Court decision on Trump’s tariffs, the global risk sentiment has improved meaningfully. The development has buoyed global markets, with GIFT Nifty rising over 1%, suggesting a gap-up opening for the Nifty at the start of the week, barring any fresh adverse global triggers. This is expected to prompt new investors to consider their equity options.
For those well-versed in the nitty-gritty of direct stock market investment, choosing a stock for their portfolio would be easy, but for those who are ready to take market risk but don’t have the wit to fish out stocks from direct investment, equity mutual funds can be a good option. According to market and investment experts, an investor can accumulate a substantial amount over the long term even by investing indirectly in equities.
Advising fresh investors about the uncertainty and high risk involved in the current Indian stock market, Ponmudi R, CEO at Enrich Money, said, “While supportive global cues may contribute to a positive start to the week, the durability of the move will depend on the Indian stock market’s ability to reclaim and sustain above key resistance levels. Continued institutional support and improving momentum indicators will be critical in determining whether the current rebound evolves into a sustained uptrend.”
Why are mutual funds better?
Advising equity investors to start a mutual fund SIP and beat the volatility of the markets, SEBI-registered investment expert, Jitendra Solanki, said, “If the stock market is volatile, then one should first invest a lump sum amount in an equity mutual fund plan and then keep investing a certain amount in a monthly SIP mode. This helps an investor gain manyfold.”
On the suggestion to investors with a low risk appetite, Pankaj Mathpal, CEO & MD at Optima Money Managers, said that direct stock investment is not for them. They should consider equity mutual funds for long-term investing.
“Going with a monthly SIP would be better because it doesn’t require the investor to wait for a good time to buy. The investor can start SIP on any day, irrespective of the market trends, because it is free from the market volatility,” said Pankaj Mathpal. He said that the 15 x 15 x 15 rule of mutual funds states that a ₹15,000 monthly SIP in equities can yield a 15% annual return over 15 years.
How to accumulate ₹10 crore in 15 years?
On how to accumulate ₹10 crore in 15 years, Kartik Jhaveri, Director at Transcend Capital, said, “To accumulate ₹10 crore in 15 years, an investor needs to follow the 15 x 15 x 15 rule of mutual funds with some pun. They should increase their monthly SIP amount annually. Generally, the annual SIP step-up is 15%, but to achieve such an ambitious target of ₹10 crore in 15 years, one needs to increase the annual step-up by 20%.”
Experts said that a mutual fund SIP provides an average annual return on one’s money, as determined by the stock market over the investment period.
Assuming a 15% annual return on one’s equity mutual fund SIP, with a 15-year tenure and an annual step-up of 20%, the SBI mutual fund calculator suggests that an investor will need to start with a monthly SIP of ₹51,000.
Mutual fund plans to look at
On mutual funds that one can look at for whopping returns through SIPs, Pankaj Mathpal of Optima Money Managers listed out the following plans:
1] HDFC Flexi Cap Fund;
2] Nippon India Multicap Fund;
3] ICICI Prudential Value Fund;
4] Kotak Multicap Fund; and
5] Invesco India Large & Midcap Fund.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
