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Business News/ Mutual Funds / Mutual Funds: Monthly SIP of 12,000 in this value fund would have grown to 36 lakh in 10 years
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Mutual Funds: Monthly SIP of ₹12,000 in this value fund would have grown to ₹36 lakh in 10 years

Tata Equity PE Fund is a value mutual fund which has given an annualised return of 17.37 per cent in the past 10 years, thus letting an accumulated investment of ₹14.41 lakh to swell to ₹35.89 lakh in just a decade

Value mutual fund is a category of mutual funds that are meant to follow value investment strategy, with at least 65 percent investment in stocksPremium
Value mutual fund is a category of mutual funds that are meant to follow value investment strategy, with at least 65 percent investment in stocks

Consistency pays overwhelmingly high returns in the world of investing which means a regular stream of investment — albeit in small quantities — reaps great dividends.

The returns on investment get amplified when the investment is made on a regular basis via systematic investment plans (SIP).

Here we showcase the power of compounding with the help of an illustration of Tata Equity PE Fund which has delivered an annualised return of 17.37 percent in the past 10 years, shows Value Research data.

Tata Equity PE Fund is a value mutual fund, which is a category of mutual funds that are mandated to follow value investment strategy, with at least 65 percent investment in stocks. Value funds identify stocks that are currently undervalued but are expected to perform well over time as the value is unlocked.

Return on investment

If someone had decided to invest 12,000 consistently for 10 years in a row in this mutual fund scheme, the investment would have grown to 35,89,939 i.e., around 36 lakh.

It is noteworthy that a total of 14.41 lakh was invested into this scheme over a span of10 years. An assumption was made that an initial investment of 1,000 was also made at the time of investing into the scheme.

Additionally, if someone had invested this sum for a regular period of two years, the investment would have grown to 4,06,472 by investing a sum of 2,89,000.

Tenure                          Investment Return Annualised return (%)
22,89,000 4,06,472 36.46
34,33,000          6,47,611 27.88
7,21,000          13,19,045 24.36
10,00,00019,87,899 19.01
1014,41,00035,89,93917.37

(Source: Value Research; return as on Feb 21, 2024)

Likewise, if an investor had continued to invest 12,000 via SIP for three continuous years, the sum would have grown to 6,47,611 by investing 4,33,000.

In five years, a regular investment of 12,000 via SIP would have grown to 13,19,045 by investing a total sum of 7.21 lakh.

Similarly, if an investor had maintained this investing regime for seven long years, the investment would have swelled to 19,87,899 by investing a little over 10 lakh.

About the scheme

It was launched on Oct 5, 2009. This value mutual fund has investments across 11 sectors including financials, energy, materials, automobile, capital goods, consumer staples, technology, textile, healthcare and services.

Overall, it has investments in 39 stocks including HDFC Bank, Bharat Petroleum, Hero MotoCorp, ITC, Kotak Mahindra Bank and Hindustan Aeronautics.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.

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Published: 22 Feb 2024, 04:30 PM IST
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