The expert review published on ET Now — led by Samir Shah of Axis Securities — is a timely reminder of how disciplined SIP (Systematic Investment Plan) behaviour, step-up increases and careful fund selection can materially change an investor’s long‑term outcome; the piece couples specific mutual fund names with practical allocation rules and shows several investor case studies that aim for a Rs 2 crore corpus. The core message is straightforward: starting with a sizeable monthly SIP, increasing contributions over time (either by a fixed rupee amount or by a percentage), and leaning into high‑growth categories such as mid‑cap and small‑cap funds can accelerate wealth creation — but the headline numbers depend entirely on return assumptions, time horizon and concentration risk. This feature unpacks the ET Now recommendations, verifies the math and assumptions, highlights strengths, and flags the practical risks and trade‑offs investors should understand before acting.
Mutual fund SIPs remain one of the most accessible paths to equity investing in India. SIPs convert irregular income into disciplined monthly investments, automatically rupee‑cost average market volatility, and — crucially — harness compounding. The ET Now article walks through eight investor case studies and a recommended core portfolio comprising flexi‑cap, large‑cap index, mid‑cap and small‑cap funds, plus a small allocation to gold/passive funds. The expert guidance emphasizes two levers to hit aggressive corpus targets like Rs 2 crore:
FV = P × [((1 + r)^n − 1) / r] × (1 + r)
Where:
Multiple independent SIP calculators implement the same math and confirm the direction: regular increases materially boost final corpus. A 10% annual step‑up can change a near‑crore outcome into a multi‑crore outcome over long time horizons — but this improvement depends on the assumed return rate and the investment horizon.
Two immediate cautions:
Practical investors should treat the ET Now numbers as scenario‑based illustrations rather than promises. The right course is to test personalized scenarios with a robust SIP/step‑up calculator, limit concentration and cost creep, secure emergency liquidity, and keep decisions aligned with a documented investment policy. That approach preserves upside while protecting against the very real downside of volatility and changing market regimes.
Source: ET Now Mutual Fund SIP: 8 schemes for Rs 2 crore goal - FULL LIST
Background / Overview
Mutual fund SIPs remain one of the most accessible paths to equity investing in India. SIPs convert irregular income into disciplined monthly investments, automatically rupee‑cost average market volatility, and — crucially — harness compounding. The ET Now article walks through eight investor case studies and a recommended core portfolio comprising flexi‑cap, large‑cap index, mid‑cap and small‑cap funds, plus a small allocation to gold/passive funds. The expert guidance emphasizes two levers to hit aggressive corpus targets like Rs 2 crore:- Increase SIPs over time — either by a fixed annual rupee rise (e.g., Rs 2,000/year) or a percentage step‑up (e.g., 10% annually).
- Tilt asset allocation toward higher‑growth segments — notably mid and small caps, while retaining a large‑cap/index core.
What ET Now recommended — the portfolio and the premise
The headline portfolio (example)
One of the sample allocations presented for a Rs 41,000 monthly SIP (with scope to step up annually) was:- Parag Parikh Flexi Cap Fund – Rs 12,000
- Motilal Oswal Midcap Fund – Rs 12,000
- Nippon India Small Cap Fund – Rs 10,000
- UTI Nifty 50 Index Fund – Rs 7,000
- Large-cap funds: 30–40%
- Mid-cap funds: 20–30%
- Small-cap funds: up to 20%
- Flexi-cap funds: 20–30%
- Gold / Passive funds: up to 10%
The step-up recommendation and projected math
ET Now reports two central comparisons for the Rs 41,000 investor over a 10‑year horizon:- A fixed annual increase of Rs 2,000 in the SIP (i.e., Rs 41,000 → Rs 43,000 → Rs 45,000 …) combined with a 12% assumed CAGR produces an estimated corpus of roughly Rs 1.2 crore.
- A 10% annual step-up (i.e., SIP grows 10% each year) under the same 12% return assumption is presented as a path to reach close to Rs 2 crore over the same 10‑year period.
Verifying the math — how the SIP model works and why assumptions matter
The SIP formula, in simple terms
The standard monthly SIP future‑value formula used by calculators is:FV = P × [((1 + r)^n − 1) / r] × (1 + r)
Where:
- P = monthly SIP
- r = monthly return (annual return / 12)
- n = total months
Multiple independent SIP calculators implement the same math and confirm the direction: regular increases materially boost final corpus. A 10% annual step‑up can change a near‑crore outcome into a multi‑crore outcome over long time horizons — but this improvement depends on the assumed return rate and the investment horizon.
Why the 12% figure is the pivot point
The ET Now examples consistently use 12% annual returns. That number is commonly used in retail planning because it sits slightly above long‑term historic equity returns in many markets and is a round, optimistic assumption for equity portfolios that include mid and small caps.Two immediate cautions:
- 12% is an assumption, not a guarantee. Actual fund returns vary year‑to‑year and by strategy — large‑cap index funds may deliver lower volatility and slightly lower returns; concentrated mid/small cap funds can outperform or underperform dramatically.
- Volatility matters. Higher expected returns from small and mid caps come with higher drawdowns and longer recovery periods. An investor who needs money in a short window can be hurt by a late‑cycle correction.
Fund picks and allocation — strengths and friction points
Strengths of the chosen funds and structure
- Core-and-satellite approach: The mix of a flexi‑cap core, a Nifty 50 index sleeve, and focused mid/small cap satellites is a pragmatic way to blend diversification with growth potential.
- Flexi‑cap inclusion (Parag Parikh / PPFAS): Flexi‑cap funds can rotate between caps to capture value and provide ballast in volatile markets.
- Index allocation (UTI Nifty 50 Index Fund): Low‑cost, high‑quality diversification across large caps reduces single‑stock and manager risk.
- Mid & small cap exposure: Historically the biggest wealth creation in Indian equity has come from mid and small caps over long horizons, and the article acknowledges that by limiting small cap to a maximum of ~20% to manage risk.
Points that need scrutiny
- Concentration risk: Several recommended portfolios include multiple mid and small cap funds. Without careful overlap analysis, investors can end up with concentrated exposures to the same sectors or stocks across funds.
- Active manager risk: Funds like Motilal Oswal Midcap, Quant Small Cap and Nippon Small Cap have strong track records in certain windows, but past outperformance does not guarantee future results and some of these funds show high dispersion year to year.
- Expense ratios and tax drag: Active funds can carry higher expense ratios which erode compounded returns over time. The article does not list costs; investors should factor this in.
- Thematic funds warning: The expert counsel to exit thematic and sectoral funds (where present) is sound: thematic funds can concentrate risk and are more timing‑sensitive than broad flexi‑cap or index funds.
Case study analysis — what the numbers really mean
The ET Now piece runs several real‑investor examples. Key takeaways:- A Rs 41,000 monthly SIP with small fixed annual rupee increases produces a meaningful corpus, but a percentage step‑up (e.g., 10%) amplifies growth far more efficiently because the increase compounds.
- A Rs 20,000 monthly SIP over 15 years at 12% was shown to produce about Rs 1 crore (ET Now reports this), and doublingg the SIP or introducing a ~13% yearly increase is presented as the path to Rs 2 crore. Independent SIP models and calculators show the same sensitivity: doubling contributions or materially increasing annual contributions is the most direct route to doubling the final corpus.
- For modest SIPs (e.g., a beginner’s Rs 1,000 monthly), the article correctly notes that ten‑year outcomes are small in absolute terms, and step‑ups do improve outcomes but the scale remains modest — reinforcement that long horizons and higher starting amounts scale better.
Practical risk and suitability checklist
Before implementing the ET Now style portfolio, evaluate:- Time horizon alignment: Mid and small caps require long time horizons (typically 7–15+ years) to smooth out drawdowns.
- Emergency liquidity: Maintain 6–12 months of living expenses in liquid instruments before committing large sums to equity — one of the article’s practical points.
- Rebalancing discipline: Set a rebalancing schedule (semi‑annually or annually) to prevent drift (e.g., small cap rising to >25% after a rally).
- Overlap analysis: Use the funds’ top‑10 holdings to check for commonalities. High overlap defeats diversification.
- Expense ratio and tax: Compare direct plan expense ratios and consider exit loads and capital gains tax rules when planning redemptions.
How to convert ET Now’s high‑level advice into an actionable plan
- Run a personal SIP stress test:
- Use a step‑up SIP calculator or spreadsheet.
- Model 8%, 10%, 12% and 15% returns.
- Simulate both fixed rupee and percentage (e.g., 10%) annual increases.
- Decide the allocation weight that matches risk appetite:
- Conservative growth (lower volatility): 50–60% large/index / 20–30% flexi‑cap / 10–20% midcap / 0–10% small cap.
- Aggressive growth: 30–40% large/index / 20–30% flexi‑cap / 20–30% midcap / up to 20% small cap.
- Implement step‑ups that match income growth:
- Link your step‑up percentage to expected salary increases (e.g., 5–15%).
- Consider automated step‑up facility where available.
- Use STP for lumps:
- For a large lump sum (a Rs 40 lakh windfall, for example), the article’s STP recommendation is sensible: gradually move cash into equity via monthly tranches using STP to reduce immediate timing risk.
- Re‑assess annually:
- Review allocations, fund performance, and life goals annually and rebalance if needed.
Alternatives & complements to the recommended funds
- Index‑heavy core: If cost is a priority, increase the index/large‑cap sleeve and reduce active small‑cap risk.
- Balanced advantage / hybrid funds: For investors uncomfortable with direct equity volatility, an allocation to a balanced advantage fund can smooth volatility via tactical asset allocation — ET Now suggested HDFC Balanced Advantage as an STP target.
- Tax optimized options: Use tax‑saver ELSS funds for concurrent tax benefits if relevant, but keep the lock‑in and diversification implications in mind.
- Direct vs Regular plans: Prefer direct plans to reduce expense ratio drag if comfortable handling investments directly.
What the data and independent checks say (summary of verification)
- The SIP mathematics used by the article aligns with standard annuity formulas and step‑up SIP calculators. The direction of ET Now’s conclusions — steady increases in SIP contributions materially boost final corpus — is confirmed by independent SIP calculators and financial planning literature.
- Fund performance claims (for funds like Parag Parikh Flexi Cap, Nippon India Small Cap, Motilal Oswal Midcap, Quant Small Cap, UTI Nifty 50 Index Fund) match public mutual fund performance data: these funds have delivered differentiated returns over multi‑year windows, but their trailing returns and risk profiles vary widely by fund, period and market cycle.
- Projections that show doubling corpus by doubling contributions or applying annual step‑ups in the teens are mechanically accurate given the 12% assumption — but they are model‑dependent. Changing the return assumption by a few percentage points, shortening the horizon, or encountering a prolonged multi‑year market drawdown can produce materially different outcomes.
Recommendations for readers who want to follow the article’s guidance
- Model your scenario first. Before reallocating funds, run the exact numbers for your current SIP, planned step‑ups and desired target using a step‑up SIP calculator or a spreadsheet.
- Document an allocation policy statement. Write down your target weights, step‑up policy (percentage or fixed rupee), rebalancing rules and emergency fund guidelines.
- Watch costs. Use direct plans where possible, and compare expense ratios across similar funds.
- Limit small cap exposure by label, not by rhetoric. Keep small‑cap allocation capped (the article’s 20% max is sensible) and be ready to hold through volatility.
- Use STP for large sums. For lump sums, use systematic transfer plans into equity to reduce timing risk and psychological stress.
- Periodically validate the math. Review results annually and change assumptions if market expectations or life goals change.
Bottom line
The ET Now fund‑portfolios and the step‑up SIP advice are practical, disciplined templates for investors targeting an ambitious Rs 2 crore corpus. The core lessons are durable: start early, invest consistently, increase contributions as income rises, maintain a diversified core, and use index exposure plus active satellites. However, the headline dollar—sorry, rupee—figures hinge on a 12% annual return assumption and on a willingness to accept mid‑ and small‑cap volatility. Independent checks confirm the directional correctness of the recommendations: step‑ups and higher allocations to growth categories boost final corpus. What they do not guarantee is precision.Practical investors should treat the ET Now numbers as scenario‑based illustrations rather than promises. The right course is to test personalized scenarios with a robust SIP/step‑up calculator, limit concentration and cost creep, secure emergency liquidity, and keep decisions aligned with a documented investment policy. That approach preserves upside while protecting against the very real downside of volatility and changing market regimes.
Source: ET Now Mutual Fund SIP: 8 schemes for Rs 2 crore goal - FULL LIST
