Can Rs 20 lakh grow into Rs 3 crore in 15 years? Here’s what expert recommends

Planning a long-term financial goal like building a multi-crore corpus requires a disciplined investment strategy, the right asset allocation, and patience across market cycles. While systematic investment plans (SIPs) are a powerful tool, investors often face confusion around fund selection, diversification, and whether to stick with underperforming schemes.

Going through something similar is Harsh, a 38 year old Mumbai based investor and a viewer of The Money Show on ET Now, who sought a review of his mutual fund portfolio. With a current corpus of Rs 20 lakh and a target of Rs 3 crore over the next 15 years, he is investing through SIPs in Parag Parikh Flexi Cap Fund, HDFC Flexi Cap Fund, Motilal Oswal Midcap Fund, and Tata Small Cap Fund.

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The investor also plans to increase his SIP contribution by Rs 20,000 and wants to know whether to continue with the existing funds or make changes.

Responding to the query, market expert Shweta Jain noted that the current allocation, around 50% in flexi-cap funds and 25% each in midcap and small-cap funds, is reasonably well-balanced for long-term growth. She added that the investor appears to be on the right track, especially if the additional SIP aligns with his target calculations.

“He currently has almost 50% dedicated to flexicap and 25% each to midcap and smallcap which is actually not a bad idea. He needs 20K additional to invest to get to his target and that is exactly what he wants to do as well. So, he is on the right track,” the expert said.

However, she suggested strengthening the portfolio by adding a dedicated large-cap component. While flexicap funds have the flexibility to move across market segments, they may tilt towards mid and small caps depending on market conditions.

To create a stable core, Jain recommended allocating the additional Rs 20,000 SIP into a low-cost index fund such as a Nifty 50-based fund like DSP Nifty 50 Fund or UTI Nifty 50 Fund.

“I would recommend something like a DSP Nifty 50 that he can add on and 20K will give him a good solid sort of foundation for his portfolio and then as the portfolio progresses he can increase mid, he can increase smallcap as well,” the expert said.

This addition, she explained, would provide a solid largecap foundation to the portfolio, improving stability while maintaining growth potential. Over time, the investor can consider increasing exposure to mid and small caps as the portfolio evolves.

Addressing concerns about underperformance, Jain said that midcap and smallcap funds typically require a longer investment horizon to deliver meaningful returns. She suggested that midcap funds should ideally be held for at least three to five years, while small-cap funds may need five to seven years to realise their potential. Short-term underperformance, therefore, should not be a reason to exit.

The expert said, “Tata Small and Motilal Midcap are not giving returns right now. Yes, I do not know how long you have been invested, but it does take time. So, midcap I would say anywhere three to five years, smallcap I would say five to seven years is a good time to sort of see.”

She also highlighted that the Motilal Oswal Midcap Fund tends to follow a relatively aggressive strategy, and investors should assess their comfort with volatility before continuing. However, she clarified that the fund itself remains a good option within the portfolio.

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On the flexi-cap side, Jain noted that holding both Parag Parikh Flexi Cap Fund and HDFC Flexi Cap Fund is acceptable, as they follow different investment styles. While some overlap is inevitable, it is not significant enough to warrant consolidation.

“He can continue with HDFC Flexicap, Parag Parikh Flexicap while they both flexi caps are quite different in their styles, so I would say it is fine. There is not much duplication. Of course, there will be overlap in between but not much. So, I think you can continue with both of these,” Shweta Jain said.

As the date or time period of investment is not known, the expert recommended continuing the investments. She said, “But like I said we do not know since when they are invested and how much is there in each of these portfolios, we just know the monthly allocation, so with that limitation this is the recommendation.”

Overall, the expert advised against redeeming any existing funds at this stage. Instead, the focus should be on strengthening the portfolio with a core large-cap allocation and continuing disciplined SIPs. With a well-diversified mix and a long-term approach, the investor is well-positioned to work towards his Rs 3 crore goal.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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