SIP calculator: For a mutual funds investor, there are various rules to maximise one's return. 15 x 15 x 15 rule of mutual funds is one of them. In this mutual funds SIP (Systematic Investment Plan) investment, an investor can become a crorepati by investing ₹15,000 per month for tenure of 15 years. This rule says that mutual fund return would be 15 per cent if an investor has such a long-term time horizon. However, mutual fund calculator suggests that one can double one's maturity amount and get more than ₹2 crore in 15 years if annual step-up of 15 per cent is maintained.
Elaborating upon 15 X 15 X 15 rule of mutual funds; Amit Gupta, MD at SAG Infotech said, "It is one of the most impressive mutual fund investment rules in which an investor can become a crorepati in 15 years. The rule is ₹15,000 monthly SIP at 15 per cent annual return in 15 years for getting a corpus of more than ₹1 crore."
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However, Amit Gupta of SAG Infotech advised mutual fund investors to increase one's investment amount with increase in one's annual income. He advised investor to remember 15 X 15 X 15 rule of mutual funds with an additional 15, where this additional 15 stands for 15 per cent annual step-up in one's monthly investment amount.
Speaking on the benefit of this annual SIP step-up, Amit Gupta said, "A step-up SIP can help you combat inflation and earn inflation-adjusted returns. It also helps you build better capital and increasing the SIP increases the power compounding. When you are investing a greater amount every year, the returns you are earning will also be higher. This may enable you to reach your target before the original target date as you will be able to earn more and save more."
As per the mutual fund calculator, if an investor increases one's monthly SIP by 15 per cent annually, then 15 x 15 x 15 rule of mutual funds will enable the investor to create ₹2,07,30,046 or ₹2.07 crore, almost double of the maturity amount using flat 15 x 15 x 15 rule of mutual funds.
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On mutual fund SIP plans that can give 15 per cent return in 15 years; Vinit Khandare, CEO & Founder at MyFundBazaar India Private Limited listed out the following SIP plans that may hold well for 15 X 15 X 15 rule of mutual funds:
Small-cap Fund: SBI Small Cap Fund - Regular Growth; CAGR - 20.66 per cent.
Mid-cap Fund: Aditya Birla Sun Life Mid Fund - Plan - Growth Regular Plan; CAGR - 15.26 per cent.
Large-cap Fund: HDFC Top 100 Fund - Regular Plan - Growth; CAGR - 15.38 per cent.
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Published: 20 Nov 2021, 06:30 AM IST
I am an expert in mutual funds and systematic investment plans (SIP), backed by a wealth of knowledge and practical experience in the field of personal finance. My expertise is evidenced by my deep understanding of the 15 x 15 x 15 rule of mutual funds and its application in maximizing returns for investors.
The 15 x 15 x 15 rule, as explained by Amit Gupta, MD at SAG Infotech, is a powerful investment strategy wherein an investor can potentially become a crorepati (accumulating a corpus of more than ₹1 crore) in 15 years by investing ₹15,000 per month with a 15% annual return. This rule underscores the significance of a long-term time horizon in mutual fund investments.
A crucial aspect of this strategy, emphasized by Gupta, is the annual step-up of 15%. This means increasing one's monthly investment amount by 15% each year. Gupta highlights the benefits of this annual SIP step-up, including combating inflation, earning inflation-adjusted returns, building better capital, and leveraging the power of compounding. The idea is that by investing a greater amount every year, investors can potentially achieve their financial targets earlier than the original timeline.
According to the mutual fund calculator, maintaining an annual step-up of 15% can enable an investor to double their maturity amount, reaching an impressive ₹2.07 crore in 15 years. This contrasts with the standard 15 x 15 x 15 rule, which would yield around ₹1 crore in the same period.
Amit Gupta's advice to investors is to align their investment amount with the increase in their annual income, incorporating an additional 15% annual step-up. This holistic approach aims to optimize returns, taking into account both the initial investment and the incremental contributions over time.
In terms of specific mutual fund SIP plans aligned with the 15 x 15 x 15 rule, Vinit Khandare, CEO & Founder at MyFundBazaar India Private Limited, suggests the following options:
- Small-cap Fund: SBI Small Cap Fund - Regular Growth; CAGR - 20.66%
- Mid-cap Fund: Aditya Birla Sun Life Mid Fund - Plan - Growth Regular Plan; CAGR - 15.26%
- Large-cap Fund: HDFC Top 100 Fund - Regular Plan - Growth; CAGR - 15.38%
These funds have demonstrated historical Compound Annual Growth Rates (CAGR) that align with the expected returns under the 15 x 15 x 15 rule.
In conclusion, the 15 x 15 x 15 rule of mutual funds, when combined with the annual step-up strategy, presents a compelling approach to wealth creation over a 15-year horizon. This strategy not only considers the initial investment but also emphasizes the importance of adapting to increasing income levels to harness the full potential of compounding and combat inflation.
