The power of compounding is so profound that it is referred to as ‘magic’. And rightly so! Investors of all hues such as Warren Buffett and Charlie Munger attribute this magic for the massive wealth they have managed to accumulate over a period of time.Here we share details of one mutual fund scheme i.e., Quant ELSS Tax Saver Fund and the returns it generated in order to elucidate the power of compounding.This scheme was launched on April 13, 2000. And if someone had decided to invest ₹1 lakh at the time of launch nearly 24 years ago, the investment would have grown to ₹34 lakh by now.Let us see how it works but let us first understand what exactly are equity linked savings scheme (ELSS) mutual funds.What are ELSS funds?ELSS schemes refer to mutual funds which invest at least 80 percent in stocks in accordance with ELSS, 2005 notified by the Ministry of Finance.These schemes have a lock in period of 3 years which is the shortest amongst all other tax saving options. They are currently eligible for deduction under section 80C of the Income Tax Act up to ₹1.5 lakh.There are 42 open ended ELSS schemes with total assets under management (AUM) amounting to ₹2.04 lakh crore as on Jan 31, 2024, shows the data released by Association of Mutual Funds in India (AMFI).Quant ELSS Tax Saver FundThis mutual fund scheme has delivered a return of 47 percent in the past one year. This means if someone had invested ₹one lakh a year ago, the investment would have grown to ₹1.47 lakh.Likewise, thanks to 35.20 percent CAGR return given by the mutual fund in the past three years, the investment of ₹one lakh would have grown to ₹2.47 lakh.In the past five years, the mutual fund has given an annualised return of 30.88 per cent return, which means an investment of ₹one lakh would have grown to ₹3.84 lakh in half a decade.(Source: Quantmutual.com; Returns as on Jan 31, 2024)Finally, if this investment of ₹one lakh were not redeemed and it remained invested since the scheme’s launch on April 13, 2000, this investment would have grown to ₹34.33 lakh during these 23 years.More details The key portfolio constituents are RIL, Adani Power, Aurobindo Pharma, Hindalco, Sun Pharma, Jio Financial Services, Britannia, GAIL, BHEL and Grasim.The sector-wise weightage of the scheme constitutes financial services (20.9 per cent), metals & mining (15.6 per cent), healthcare (13.1 per cent), power (8.8 per cent) and capital goods (5.3 per cent). The scheme has total assets under management (AUM) of ₹7,530 crore, as per the AMFI data as on Feb 9, 2024.The fund managers of the scheme are Vasav Sahgal and Ankit Pande.