Rs 15,000 SIP made investors crorepatis in 15 years: These 30 mutual funds struck gold

A Rs 15,000 monthly SIP could have turned total contributions of Rs 27 lakh into as much as Rs 1.74 crore over 15 years, but only in the right mutual fund scheme. An analysis of 138 equity mutual fund schemes shows that investments made in the last 15 years crossed the Rs 1 crore mark in at least 30 schemes. The highest corpus was generated by Nippon India Small Cap Fund, where the investment grew to Rs 1.74 crore.

The same monthly investment, however, resulted in vastly different outcomes across schemes. The final corpus across the 138 funds ranged from Rs 58.85 lakh to Rs 1.74 crore, according to data from ACE MF.

The data underlines the importance of scheme selection after an investor has decided the broad asset allocation. It also highlights the risk of treating historical returns from small-cap and mid-cap funds as a straightforward projection of future wealth.

“Asset allocation determines the broad risk profile of a portfolio, but scheme selection plays an important role in determining how effectively that allocation is implemented,” Anand K. Rathi, Co-Founder, MIRA Money, told ET Markets.

Two funds in the same category can produce materially different outcomes because of differences in investment philosophy, portfolio construction, concentration, risk management, costs and execution, he said.

However, investors should distinguish between genuine, repeatable outperformance and returns generated during a favourable market cycle.

“But investors should know the difference between making alpha and just making money during a certain market wave,” Rathi said.

Also Read | 20 midcap funds, 20 multibaggers: What makes this category a wealth creation machine?

Small-cap and mid-cap funds dominate

The list of 30 schemes that crossed Rs 1 crore was dominated by mid-cap and small-cap funds.

Fourteen of the 30 schemes were mid-cap funds, while eight were small-cap funds. Four belonged to the large-and-mid-cap category. The remaining four included one ELSS fund, one flexi-cap fund, one multi-cap fund and one value fund.

The top performer was Nippon India Small Cap Fund, which generated a corpus of Rs 1.74 crore and an XIRR of 22.29%. SBI Small Cap Fund and DSP Small Cap Fund followed with final values of Rs 1.44 crore and Rs 1.43 crore, respectively.

Edelweiss Mid Cap Fund and Invesco India Midcap Fund completed the top five, with final values of Rs 1.36 crore and Rs 1.35 crore.

The Rs 1 crore threshold was crossed by UTI Mid Cap Fund at the lower end of the list. Its final corpus stood at Rs 1.01 crore, with an XIRR of 16.03%.

“Asset allocation is the foundation, while scheme selection can be an important source of incremental alpha within that allocation,” said Aditya Agarwal, Co-Founder, Wealthy.in.

The analysis shows that the same Rs 15,000 monthly SIP and the same 15-year period produced substantially different results depending on the scheme selected, Agarwal said.

Investors, however, should not equate scheme selection with simply picking the highest historical performer. Consistency across market cycles, downside performance, portfolio concentration, fund-manager continuity, investment process and expense ratios also need to be assessed, he said.

Can small-cap and mid-cap funds repeat this performance?

The strong representation of small-cap and mid-cap funds reflects the higher return potential these categories delivered during the period under review. It does not, however, establish that they will generate similar returns over the next 15 years.

“Small-cap and mid-cap funds made up a lot of the plans that crossed the Rs 1 crore mark. This shows that these categories had the most growth potential during the time period that was looked at,” Rathi said.

Smaller companies may offer greater earnings growth potential, but they are also more vulnerable to valuation swings, liquidity constraints, economic cycles and company-specific risks.

“Future returns will depend on earnings growth, valuations at the time of investment, capital allocation and the broader economic environment,” Rathi said.

Agarwal said the next 15 years may bring a different combination of market cycles, valuations, corporate earnings and fund flows. The Rs 1 crore outcome generated during the period cannot be replicated simply by extending the historical CAGR, he said.

Investors should therefore treat mid-cap and small-cap exposure as part of a diversified portfolio rather than assume that these categories will automatically outperform large-caps.

Also Read | Nifty SIP return fails to beat even bank FD over 5 years: Is this the warning sign investors can’t ignore?

Why the Rs 1 crore outcome is not a forecast

Historical SIP analysis demonstrates the impact of time, disciplined investing and compounding. It does not provide a guaranteed projection of future wealth.

The analysis covers one specific 15-year period, with its own sequence of economic cycles, interest rate conditions, earnings trends and valuation levels. A different start date or end date could produce a materially different outcome.

Past winners may also lose their edge as fund managers, investment processes, portfolios and market conditions change. The analysis assumes uninterrupted monthly investments, although investors may stop or redeem SIPs during sharp market corrections.

“Investors should therefore view mid- and small-cap exposure as part of an appropriately diversified allocation rather than assuming that these categories will automatically outperform large-caps over the next 15 years,” Agarwal said.

The final corpus also does not capture every investor-specific factor, including changes in SIP contributions, taxes, investment costs and the ability to remain invested during periods of high volatility.

Survivorship bias is another limitation if the analysis only includes schemes that continue to exist. Funds that were merged, discontinued or performed poorly may not be represented in the final comparison.

The central message from the data is therefore not that every ₹15,000 SIP can become a ₹1 crore investment. It is that a long investment horizon can amplify differences between schemes and that choosing a fund only because it was a historical winner can expose investors to significant forward-looking risk.

(Data inputs: Surbhi Khanna)

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