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Business News/ Mutual Funds / An SIP of 10,000 a month in this Franklin mutual fund would have made you a crorepati
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An SIP of ₹10,000 a month in this Franklin mutual fund would have made you a crorepati

Franklin India Focused Equity Fund has given an annualised return of 14.33 percent since inception. So, upon investing ₹10,000 every month, one could have enabled an investment of ₹20 lakh to grow to nearly ₹98 lakh

From the doyens of investing such as Warren Buffett and Ray Dalio to great scientist Albert Scientist, everyone has acknowledged the power of compounding Premium
From the doyens of investing such as Warren Buffett and Ray Dalio to great scientist Albert Scientist, everyone has acknowledged the power of compounding

Consistency always pays high returns. Just as in life, it pays in the world of investing as well. When an investor invests for a considerably long period in a mutual fund scheme, the returns are disproportionately higher in the latter years vis-à-vis in the initial years.

This happens because the investment grows with time and the percentage of return happens on the inflated sum. From the doyens of investing such as Warren Buffett and Ray Dalio to great scientist Albert Scientist, everyone has acknowledged the power of compounding.

High returns

To showcase the potent power of compounding, we have randomly selected one mutual fund scheme — Franklin India Focused Equity Fund – which was launched nearly 16 years ago in July 2007 and has given reasonably good returns in the recent past i.e., 14.33 per cent CAGR (compound annualised growth rate) per annum since inception.

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And if a wise investor had decided to invest 10,000 regularly in this scheme in the past one year, the investment would have grown to 1.46 lakh by investing only 1.20 lakh.

Tenure                                  Return (%) 10K SIP becomes Investment (Rs)
1 year                                                                  36.551.46 lakh1.20 lakh
3 years                                                        20.094.96 lakh3.6 lakh
5 years                                              19.7310.26 lakh6 lakh
10 years                                              19.2736.47 lakh12 lakh
S Inception                                         14.3397.58 lakh20 lakh

(Source: franklintempletonindia.com, calculated on personalfn.com)

Likewise, if someone had continued to invest 10,000 via SIP (systematic investment plan) for three continuous years, the investment would have grown to 4.96 lakh by investing 3.6 lakh.

In five years, this investment would have grown to 10.26 lakh by making an investment of 6 lakh.

Similarly, by making a regular investment of 10,000 via SIP over a period of 10 years, investor would have accumulated 36.47 lakh by making an investment of 12 lakh.

And similarly, if someone had been persistent enough to invest 10,000 every month since the scheme’s inception, the investment would have grown to 97.58 lakh by making a total investment of 20 lakh.

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: 24 Mar 2024, 10:30 AM IST
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