Mutual fund investors might be turning cautious in the short term, especially amid ongoing geopolitical tensions related to the US-Iran dispute. Yet the power of long-term investing continues to tell a compelling story.
According to the latest Association of Mutual Funds in India (AMFI) data, equity mutual fund inflows month-on-month to a one-year low of ₹22,907 crore in May 2026, compared with ₹38,440 crore in April 2026. Even so, remain among the most reliable tools for wealth creation.
A simple yet powerful example highlighting this potential is an investor who is willing to contribute ₹2,000 per month through a SIP for about 300 months (i.e., 25 years) and earns an average return of 12%.
This way, an investor can accumulate nearly ₹38 lakh over the entire period through compounding and wealth creation from timed, manageable and meaningful investments in a well-known mutual fund. The primary focus here is on following a routine and not breaking monthly .
Basics of how a ₹2,000 SIP can grow into nearly ₹38 lakh in 25 years
|
Particulars |
Value |
|---|---|
| Monthly SIP | ₹2,000 |
| Investment Period | 25 Years |
| Total Amount Invested | ₹6,00,000 |
| Expected Annual Return | 12% |
| Estimated Corpus After 25 Years | ₹37.95 Lakh |
Note: Mutual fund returns are subject to market risks. Past performance is not indicative of future results. The 12% return is assumed here. It is just an example, subject to change and influenced by market conditions.
The calculation in this case is simple: over the entire 25-year period, the investor contributes only ₹6 lakh, yet the wealth created is more than six to seven times the invested amount, primarily due to .
This is why market veterans, investing legends such as and Charlie Munger, among others, always highlight the importance of patience, time, and compounding in wealth creation and management.
AMFI data shows that broad-based moderation has occurred in equity fund inflows. Large-cap fund inflows declined to ₹1,593 crore in May 2026 from ₹2,525 crore in April 2026, while mid- and small-cap categories also witnessed subdued inflows. These developments encourage the case of long-term economic growth based on compounding.
Stock market volatility, the ongoing US-Iran dispute, elevated crude oil prices and global uncertainties have prompted some investors to adopt a conservative, defensive approach.
Still, if you are aiming to create long-term wealth, periods of market downturns, volatility, and recessions can often reinforce the importance of staying invested and continuing SIP contributions in a dedicated and consistent manner to build substantial wealth over time. The total returns can also be boosted further by doing step-up SIPs if your financial capacity permits over the years.
Significance of professional guidance
Before you decide to invest in stocks, bonds, mutual funds, gold or any other asset class, check with a certified financial advisor to get proper advice tailored to your risk tolerance and current financial situation.