'Your SIP won’t make you Mukesh Ambani': PPFAS MF CIO sets the record straight

Rajeev Thakkar, CIO of PPFAS Mutual Fund, delivered a reality check at the fund house’s 2025 unitholders’ meet: “Your Rs 1,000 monthly SIP is not going to make you Elon Musk or Mukesh Ambani.”

Thakkar’s message wasn’t meant to discourage investors, but to reset expectations about wealth creation through mutual funds. While compounding is powerful, he stressed that the principal—or ‘P’ in the compound interest formula—needs to be meaningful to generate significant wealth.

“The investment journey’s most critical inputs—how much you invest and for how long—are decisions only investors control,” Thakkar said. Fund managers can advise, but they can’t influence when someone starts or exits.

He cautioned against overestimating the fund manager’s role in returns. Even the ‘R’—the rate of return—lies partly outside the control of the investment team. “If the market is down 40%, don’t expect us to double your money,” he said. “At best, we aim to do better than the index by being disciplined and following process.”

Many investors, he noted, chase returns or try to game the system—parking short-term funds in equity, applying for IPOs based on grey market premiums, or assuming that high equity allocation equals higher returns. Such strategies, he warned, are misplaced, especially when financial goals are near-term.

Equities, Thakkar emphasized, are best suited for long-term horizons. Using them for short-term goals like home purchases or education expenses in 1–3 years is risky.

He also debunked the assumption of consistently high returns. “Double-digit annual equity returns of 15–18% are now history. With lower inflation, nominal returns are also lower—and that’s a good thing,” he said, urging investors to temper their expectations.

Ultimately, Thakkar advised investors to focus less on alpha and more on disciplined investing with realistic return assumptions—not on past performance or headlines.