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4 Years Rs. 1,50,000 SIP - What would be the Value?

Samraat

Samraat Jadhav  |2392 Answers  |Ask -

Stock Market Expert - Answered on Feb 17, 2025

Samraat Jadhav is the founder of Prosperity Wealth Adviser.
He is a SEBI-registered investment and research analyst and has over 18 years of experience in managing high-end portfolios.
A management graduate from XLRI-Jamshedpur, Jadhav specialises in portfolio management, investment banking, financial planning, derivatives, equities and capital markets.... more
Asked by Anonymous - Feb 16, 2025Hindi
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Hello. I have a SIP of Rs 1,50,000 per month across large, flexi, mid and small caps. how much would the value be if I continue the same for 4 years

Ans: if you continue with your SIP of Rs 1,50,000 per month for 4 years considering an annual return of 12%, the future value of your investment would be approximately Rs 91,22,773.32. Happy investing!
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |9852 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 26, 2024

Asked by Anonymous - Feb 06, 2024Hindi
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Hi Sanjeev ji, i am Having a SIP of 10000/m in icici flexicap fund growth and continueing and 5000/m in canara Robeco emerging equities regular growth from last 31months. 3000/m Franklin tempolton from 2015. My question is Shall i continue the same for another 4years OR need to change? if i continue for 4years what would be the carpus expected??**??
Ans: Investing in mutual funds through Systematic Investment Plans (SIPs) is a smart strategy. You've been committed to investing for several years, showing dedication to your financial growth. It's natural to wonder if your current investments will continue to yield good returns in the coming years.

Importance of Continuity in SIP Investments
Continuing your SIP investments can provide several benefits. SIPs take advantage of rupee cost averaging, which reduces the impact of market volatility. Over time, this can lead to better returns compared to lump-sum investments.

Assessing Your Investment Portfolio
Your portfolio currently includes diversified funds. Each fund serves a unique purpose in balancing risk and returns. Diversified funds spread your investment across various sectors, reducing risk. This diversification helps in cushioning against sector-specific downturns.

Evaluating the Performance of Your Investments
Regularly evaluating the performance of your investments is crucial. Your current funds have performed well over the past 31 months and even longer for some. However, it's important to compare their performance against benchmark indices and peers periodically. This helps in understanding if they continue to meet your investment goals.

Benefits of Staying Invested
Continuing your current SIPs for another four years can harness the power of compounding. Compounding significantly increases your investment value over time. The longer you stay invested, the more your money grows, leading to potentially higher returns.

Expected Corpus in Four Years
While exact figures depend on market conditions, you can estimate potential returns using historical data. Typically, equity mutual funds have given an annual return of 10-12%. Assuming similar returns, your corpus can grow substantially. However, remember that past performance is not indicative of future results.

Regular Review and Rebalancing
It is essential to review and rebalance your portfolio periodically. This ensures that your investments align with your financial goals and risk tolerance. Rebalancing involves shifting investments from overperforming to underperforming assets, maintaining your desired asset allocation.

Professional Guidance
Consulting a Certified Financial Planner (CFP) can provide personalized advice tailored to your financial situation. A CFP can help in assessing your current investments and suggest changes if necessary. Their expertise ensures your investments are aligned with your long-term financial goals.

Benefits of Actively Managed Funds
Actively managed funds offer professional management, where fund managers actively select securities to beat the market. This expertise can potentially result in higher returns compared to passively managed funds. Additionally, actively managed funds provide better risk management by responding to market changes.

The Role of Financial Discipline
Continuing your SIPs requires financial discipline. It’s essential to stay committed to your investment plan, even during market downturns. This discipline helps in achieving your long-term financial objectives.

Advantages of Regular Funds
Investing through regular funds with the guidance of a Mutual Fund Distributor (MFD) and a CFP has distinct advantages. Regular funds come with the benefit of professional advice, portfolio reviews, and personalized investment strategies. This support can help in making informed decisions and optimizing returns.

Market Conditions and Flexibility
Market conditions fluctuate, and having a flexible investment strategy is beneficial. Flexi-cap funds, for instance, invest across market capitalizations, adapting to changing market scenarios. This flexibility can enhance returns and manage risks effectively.

Conclusion
Staying invested in your current SIPs for another four years can be beneficial. It allows you to leverage the power of compounding and rupee cost averaging. Regular reviews and rebalancing, with professional guidance, ensure your investments remain aligned with your goals. Your commitment to investing demonstrates financial prudence, and continuing this path can help in achieving your financial aspirations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9852 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

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Mutual Funds, Financial Planning Expert - Answered on Oct 23, 2024

Asked by Anonymous - Oct 23, 2024Hindi
Money
My age is 54. I have 4 SIPs now and invest Rs 1000 in each SIP, i.e., total 4000 per month. How much can I expect to warn after 5 years?
Ans: You are currently investing Rs. 4,000 per month across four SIPs. SIPs (Systematic Investment Plans) are a great way to invest regularly without timing the market. Over time, they tend to smoothen the market volatility, and the longer you stay invested, the better your returns can be. Since your investment horizon is five years, it's important to set the right expectations regarding how much you can earn and the growth potential.

Expected Returns After 5 Years
When investing in mutual funds, the returns you get depend on various factors. The type of funds, market conditions, and even the fund manager's expertise play a role. For your investment, let’s assume a moderate annual return of 10% to 12%, which is typical for well-managed equity mutual funds. Over five years, with Rs. 4,000 per month, your investment could grow into a substantial amount.

Let’s break this down:

You are contributing Rs. 48,000 each year (Rs. 4,000 x 12 months).

Over five years, your total contribution will be Rs. 2,40,000.

With compounding and assuming a 10%-12% return, the value of your investment could increase significantly.

Though these returns are not guaranteed, the longer-term market averages suggest this is a reasonable expectation for equity-oriented SIPs.

Impact of Market Conditions
The market fluctuates due to various reasons. Over a shorter period like five years, equity markets can sometimes experience volatility. But remember, SIPs help in averaging out the cost by buying more units when the market is low and fewer when the market is high. This rupee-cost averaging helps in reducing risks associated with market timing.

You can expect fluctuations, but patience is key.

The Power of Compounding
The longer you stay invested, the more you benefit from compounding. Compounding is like earning interest on your interest. While five years is not a very long period, the effect of compounding will still be noticeable. Your SIPs will accumulate returns, and the longer they stay invested, the more these returns compound. This makes mutual fund investments through SIPs an efficient way to grow wealth over time.

Importance of Diversification
You have diversified your investments across four different SIPs, which is commendable. Diversification reduces risk as it spreads your investments across different sectors or fund categories.

However, it is important to make sure that the funds you have selected complement each other. Too much overlap in the types of funds could reduce the benefits of diversification. If you're unsure about this, it might be a good idea to consult a Certified Financial Planner (CFP) who can guide you in balancing your portfolio.

Active Funds vs Index Funds
It’s crucial to understand the distinction between actively managed funds and index funds. Actively managed funds have a fund manager who makes investment decisions to outperform the market. These funds can generate higher returns if managed well, though they come with slightly higher fees.

On the other hand, index funds simply track a market index like the Nifty or Sensex. While index funds have lower fees, they are passive and might underperform in volatile markets because they don’t try to beat the market.

For someone with a five-year horizon like you, actively managed funds might offer better returns. They provide more flexibility in adjusting to market conditions, and their historical performance often justifies the slightly higher cost.

Direct vs Regular Funds
If you're investing in direct mutual funds, they might seem attractive because of lower expense ratios. However, direct funds come without the guidance of a Certified Financial Planner or a mutual fund distributor (MFD). This means you are left to manage your portfolio, select funds, and monitor performance by yourself.

In contrast, regular funds come with the expertise of a CFP or MFD who ensures your portfolio is optimized. While the expense ratios are slightly higher, the value added by expert advice can often lead to better returns. So, if you feel uncertain about handling your investments, consider switching to regular funds to get personalized support.

Taxation of Mutual Funds
It’s important to factor in the tax implications of your mutual fund investments. The new mutual fund capital gains taxation rules are as follows:

For equity mutual funds, long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%.

For debt mutual funds, both LTCG and STCG are taxed as per your income tax slab.

Since your horizon is five years, the equity investments will likely fall under the long-term category, and you should plan for any tax liabilities accordingly.

This tax burden can impact your final returns, so it’s wise to keep a portion of your gains aside to manage tax payments.

Review Your Investment Strategy
Since you are in the pre-retirement phase, reviewing your risk tolerance is important. While equity investments tend to offer higher returns, they come with higher risk. If you are comfortable with the volatility for the next five years, continuing with equity-oriented SIPs makes sense.

But, if you're looking for more stable returns, consider increasing your allocation to hybrid funds or conservative equity funds that balance risk and reward.

Emergency Fund Considerations
As you approach retirement, you should ensure that you have an emergency fund in place. This fund should cover at least 6-12 months of living expenses. Having this reserve ensures that you won’t need to dip into your investments in case of an emergency.

Your SIP investments should remain untouched for wealth creation, and having liquid funds separately will give you peace of mind.

Monitor Your Progress
Over the next five years, it's essential to monitor your SIPs periodically. While SIPs are designed to be long-term investments, keeping an eye on their performance ensures they are on track. You don’t need to check daily, but a review every 6-12 months will help you see if the funds are performing as expected.

Final Insights
You are on a good path with your SIPs. A steady Rs. 4,000 monthly investment is likely to yield good returns over the next five years, assuming moderate market growth.

However, consider revisiting your overall financial plan. Ensure that your investments align with your goals and risk appetite. You might want to increase your SIP amount or diversify further, depending on your future needs and retirement plans.

Keep in mind that actively managed funds, when chosen wisely, can offer better growth prospects than index funds. And while direct mutual funds seem cheaper, the expertise of a CFP can bring long-term value that outweighs the higher fees of regular funds.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Nayagam P

Nayagam P P  |9438 Answers  |Ask -

Career Counsellor - Answered on Jul 26, 2025

Career
Sir my son got 77377 crl rank in mains and 24k obc ncl rank with homestate rajasthan can he get any college with branch like cse/it/ai/ece Or what about gl bajaj delhi
Ans: Ashish Sir, With an OBC-CL home-state rank of 24 000, admission into core branches at Rajasthan’s MNIT Jaipur and IIIT Kota via CSAB-Special is feasible for certain programmes, while seats at other NITs/IIITs will likely remain out of reach.

At MNIT Jaipur, the Home-State OBC-NCL closing rank for Computer Science & Engineering extended to about 49 000 in CSAB-Special Round 2, making CSE admission virtually assured with your daughter’s rank. However, ECE seats under HS-OBC-NCL closed near 3 400, and AI/Data Science around 6 800, both well below 24 000, so these branches are not attainable at MNIT Jaipur.

IIIT Kota, as a Rajasthan campus, offers Home-State HS-OBC-NCL seats in CSE closing near 67 000, Artificial Intelligence & Data Engineering near 10 500, and ECE close around 12 600, all of which comfortably cover an OBC-NCL rank of 24 000, making these programmes strong targets in CSAB-Special.

Beyond these, other NITs in non-home-state quotas (e.g., NIT Calicut, NIT Uttarakhand) and peripheral IIITs may fill seats well below 24 000 under OS-OBC-NCL quotas, but they will not benefit from Home-State priority. Government-Funded Technical Institutes like PEC Chandigarh and MIET Jhansi admit CSE/ECE under OBC-NCL up to ranks of 40 000–70 000, offering additional assured pathways. GL Bajaj Delhi, as a private institution, participates in state or university counselling (e.g., JAC Delhi), not CSAB, and hence is not an option in this process.

Recommendation
Prioritise Computer Science & Engineering at MNIT Jaipur under HS-OBC-NCL for its assured cutoff. Simultaneously apply to IIIT Kota’s CSE and AI/DE programmes under HS-OBC-NCL for guaranteed admission. As backups within CSAB, list IIIT Kota ECE and GFTIs like PEC Chandigarh for core-branch seats under OBC-NCL quotas. However, have some Private Engineering Colleges as back-ups with son's JEE Score instead of relying only on CSAB. All the BEST for a Prosperous Future!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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