Investing in mutual funds consistently can give you high returns. In fact, consistency is the key to investing and wealth creation. If you invest over a long period of time, you will receive compounding returns.
The concoction is so powerful that it is called magic. This is how it works. When you invest in a scheme, the return on investment is added to it and then the next year’s return increases based on the principal amount (plus the previous year’s return).
For example, if you invest in: INRgive 100 INR10 percent in the first year and 10 percent in the second year. INR11 instead INR10 Invest now! INR110.
In the third year, with the same 10% growth; INR12.10. By the fifth year, it grows to INR14.64, the following year INR16.11 etc.
Here we list three mutual funds founded more than 25 years ago to show you how a modest investment can be made. INRBy 2025, there will be 100,000 more people.
Japan India Growth Fund
This fund was established on October 8, 1995. Total assets under management (AUM) is INR33,811 billion.
If someone invested INRThe plan was $100,000 at launch, but that would have grown to a tremendous amount. INRThe scheme has since delivered a CAGR (compound annual growth rate) revenue of 22.81% to $4.07 billion.
(Source: Japan India MF, AMFI)
SBI consumption opportunity fund
The scheme was launched on 5 July 1999. INR3,043,360,000. If someone invested INRIf you had $100,000 at the start of this scheme. INRThe plan’s annualized return is 16.05%, or $44.6 million.
(Source: SBI MF, AMFI)
Tata Midcap Growth Fund
The scheme was launched on 29 June 1995. INR438.7 billion. If someone invested INRWith $100,000 to start with, this scheme would have grown to: INRIt achieved a return of 13.39%, resulting in $46.18 million.
As the table above shows, the scheme has achieved a CAGR of 13% to 23% over the past 30 years.
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Note: This story is for informational purposes only. Please consult a SEBI registered investment advisor before taking any investment related decisions.
