Mutual fund investments, especially through Systematic Investment Plans (SIPs), can lead to significant wealth creation over time. One such example is the Nippon India Growth Fund, which has become a star performer in its category. Launched in 1995, this midcap-focused mutual fund has been delivering excellent returns to its investors for nearly three decades. Those who started investing just Rs 1500 per month through SIP have seen their investment grow into a massive Rs 4 crore. Let’s take a closer look at how this fund has worked its magic.
29 Years of SIP Growth: Small Savings, Big Rewards
The Nippon India Growth Fund, a top performer in the midcap category, has made headlines for its stellar long-term returns. With an annualized return of 24% over the last 29 years, this mutual fund has proven to be a champion for disciplined investors.
For those who have been consistently investing Rs 1500 every month in this scheme since its launch in 1995, the total investment over 29 years would be Rs 5,22,000. Due to the power of compounding and the impressive 24% return, that amount has grown to an astonishing Rs 4 crore!
Key SIP Calculations:
- Monthly SIP Amount: Rs 1500
- Total Investment Over 29 Years: Rs 5,22,000
- Value After 29 Years: Rs 4,05,11,207 (about Rs 4 crore)
- Annualized Return: 24%
Bigger SIP, Bigger Returns: Rs 13.5 Crore from Rs 5000 Monthly
For those who saved a bit more each month, the returns were even more eye-popping. A monthly SIP of Rs 5000 in the Nippon India Growth Fund has turned into Rs 13.5 crore over the same 29-year period. The total investment in this case would have been Rs 17,40,000, which shows the incredible impact of regular investing over the long term.
Returns on Lump Sum Investment
Apart from SIP, investors who chose to make a lump sum investment at the time of the fund’s launch have also benefited greatly. If someone had invested Rs 50,000 in the Nippon India Growth Fund in 1995, the value of that investment today would be over Rs 2 crore. The annualized return for a lump sum investment has been around 23.13%, making it an attractive option for long-term investors.
Past Performance of Nippon India Growth Fund:
The fund’s returns over different timeframes speak volumes about its performance:
- 1-Year Return: 51.21%
- 3-Year Return: 26.75%
- 5-Year Return: 31.43%
- 7-Year Return: 21.66%
- 10-Year Return: 19.46%
- 15-Year Return: 17.05%
- 20-Year Return: 21.15%
What Makes Nippon India Growth Fund a Winner?
Nippon India Growth Fund primarily invests in midcap companies, which are known for their high growth potential. Around 94% of the fund’s portfolio is invested in equity, with a strong focus on midcap stocks that have shown strong earnings growth and expansion potential. Some of the top stocks in the portfolio include:
- Power Finance
- Persistent Systems
- Cholamandalam Financial
- Federal Bank
- Fortis Healthcare
- Prestige Estates
- NTPC
- Indus Towers
- Supreme Industries
Understanding Growth Funds
Growth funds, like the Nippon India Growth Fund, focus on stocks of companies that are expected to grow faster than the market average. These companies reinvest their earnings into expansion, research, and development, which leads to higher returns over time. Growth funds are considered a good option for investors who are willing to take some market risk and have a long-term investment horizon of at least 7 to 10 years.
Fund Details: AUM, Expense Ratio, and Benchmark
As of August 31, 2024, the Nippon India Growth Fund manages assets worth Rs 33,707 crore. The fund has an expense ratio of 1.59%, which is reasonable for a midcap fund. The scheme’s benchmark is the NIFTY Midcap 150 TRI, which it has consistently outperformed.
Investors can start with as little as Rs 100 for a lump sum investment, or choose to begin a SIP with a minimum amount of Rs 100, making it accessible for all types of investors.
