Mutual Fund SIP: However, investors should understand that these are historical returns and no investment decision should be made based on past returns alone.
Mutual Fund SIP: If you are new to investing, you should always remember that the key to making money in the long term is compounding. This means that if you invest in a mutual fund scheme and stay invested for a long time, the return you get will be much higher than the return you get by investing in a lump sum. Here we are telling how much higher returns a mutual fund scheme gives when it invests through Systematic Investment Plan (SIP). Today we have chosen a mutual fund scheme – Sundaram Focused Fund and was launched in November 2005. Since then this fund has given excellent returns.
This is how investors got great returns
If you had invested Rs 10,000 every month through SIP in Sundaram Focused Fund in the last one year, it would have grown from an investment of Rs 1.20 lakh to Rs 1.44 lakh. That is, a return of 40.50 percent would have been received in the last one year. If this investment was made continuously for three years, then by investing Rs 3.6 lakh, it would have become Rs 5.13 lakh. That is, a return of 24.45 percent would have been received. Similarly, if the investment was made for five years, then a total investment of Rs 6 lakh would have given a return of Rs 10.71 lakh. That is, a return of 23.38 percent annually. Similarly, if a regular investment of ₹ 10,000 was made in this mutual fund through SIP from the beginning, it would have given a total return of ₹ 1.1198 crore. Thus, a compounded return of 15.14 percent would have been received in 18 years and 11 months.
Also Read-Â Mutual Fund SIP: You can make Rs 5 crore with a SIP of Rs 10,000, See formula here
Do take advice before investing
This is a focused mutual fund which was launched on November 11, 2005. The scheme has invested in banks (21.3%), retail (11.2%), power equipment (8.1%), pharma (7.4%), telecom (7.2%), IT (7.1%), petroleum products (6.3%), aerospace (5.2%), construction (4.9%) and finance (4.6%). However, investors must understand that these are historical returns and no investment decision should be made based on past returns alone. This is because past returns may or may not continue in the near future.
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