Active Stocks
Fri Apr 19 2024 15:56:00
  1. Tata Steel share price
  2. 162.10 1.31%
  1. Tata Motors share price
  2. 963.20 -0.84%
  1. NTPC share price
  2. 350.90 -0.14%
  1. ITC share price
  2. 424.80 1.40%
  1. Power Grid Corporation Of India share price
  2. 281.70 0.54%
Business News/ Mutual Funds / A monthly SIP of 10,000 since launch amounting to 19 lakh in this mutual fund would have grown to 1.20 cr now
BackBack

A monthly SIP of ₹10,000 since launch amounting to ₹19 lakh in this mutual fund would have grown to ₹1.20 cr now

If someone were investing ₹10,000 every month via SIP for one year, the total investment of ₹1.20 lakh would have swelled to ₹1.51 lakh, thus growing at internal rate of return (XIRR) of 52.66 percent.

Edelweiss Mid Cap Fund was launched on Dec 26, 2007. The scheme’s assets under management amount to ₹4,915 crore. Premium
Edelweiss Mid Cap Fund was launched on Dec 26, 2007. The scheme’s assets under management amount to 4,915 crore.

Compounding is too strong a weapon to be overlooked in the armoury of every investor. As the investment appreciates, the return gets added to it, thus enabling the base to grow. It is at this inflated base that the investment stands to appreciate in the successive years.

Here, we explain the virtues of compounding by taking the illustration of one mid-cap mutual fund i.e., Edelweiss Mid Cap Fund which has grown at an extended internal rate of return (XIRR) of 20.1 percent in the past 16 years since it was launched.

To put things into perspective, if someone were consistently investing 10,000 every month in this scheme, the investment would have grown substantially. The total investment made and the returns generated are given in the table below.

As one can see in the table below, if someone had made an SIP of 10,000 for one year, it would have grown to 1.51 lakh by investing a total of 1.20 lakh, which means a return of 52.66 percent. 

Likewise, if the SIPs continued for three-year period, it would have swelled to around 5.33 lakh by investing 3.6 lakh.

In a five-year period, the investment of 6 lakh would have grown to 12.26 lakh, which is more than double the investment made.

Tenor                                      Total wealth (Rs) Investment (Rs) Returns (XIRR%)
1 year  1,51,568                      1.2 lakh           52.66 
3 years 5,33,584                      3.6 lakh           27.4
5 years 12,26,847        6 lakh  29.13
since inception                        1,20,91,60619.2 lakh20.1 

(Source: edelweissmf.com, performance as on Dec 29, 2023)

And finally, if someone were consistent enough to invest 10,000 a month for the sixteen continuous years i.e., since Dec 2007 when the scheme was launched, then the total investment would have swelled to 1.20 crore by making total investment of only 19.2 lakh.

Scheme details

Edelweiss Mid Cap Fund was launched on Dec 26, 2007. The scheme’s assets under management (AUM) are 4,915 crore and expense ratio is 1.82 percent. The minimum investment is 100 and in multiples of Re 1 thereafter, as per the information shared on edelweissmf.com.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Mutual Fund news and updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 02 Mar 2024, 10:34 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App