Investing consistently in a mutual fund scheme tends to give handsome returns. And when the rate of return of the scheme is in double digits, it is like a frosting on the cake.
Sample this: Edelweiss Mid Cap Fund has given a return of 20.15 percent in the past 10 years. In other words, if someone had invested ₹one lakh a decade ago, it would have swelled to ₹6.26 lakh now. However, the higher appreciation takes place in case of systematic instalment plans (SIPs).
The fund has an AUM (assets under management) of ₹2,426 crore. The return of its benchmark index (Nifty midcap 150 TRI) was also considerably high at 18.18 percent during the same period.
Returns by Edelweiss Mid Cap Fund
| Tenure | Returns (%) | SIP of ₹13,000 becomes (Rs) | Increase (Rs) |
| 1 year | 1.73 | 1, 57, 470 | 1,57,470 |
| 3 years | 26.15 | 7,14,966 | 5,57,496 |
| 5 years | 14.03 | 11,34,561 | 4,19,595 |
| 10 years | 20.15 | 50,19,366 | 38,84,805 |
(Source: AMFI, direct returns as on Nov 14, 2022)
As one can see in the table above, an SIP of ₹13,000 every month would have grown to ₹1,57,470 in one year. In the past three years when the scheme gave a return of 26.15 percent, the investment swells to become ₹7,14,966.
In the next two years, if an investor continues to invest at the same pace, the total investment grows to ₹11,34,561.
And finally, in a total span of 10 years, the investment grows to ₹50,19,366.
What works to the advantage of investors is the growth of investment towards the end of total investment period. Upon seeing the chart more closely, one can see that in the first five years, investment accumulates to ₹11,34,561 and in the next five years, it rises to ₹50.19 lakh, thus giving an increase of ₹38.84 lakh.
This, in other words, is known as the magic of compounding.
Key facts : Edelweiss Mid Cap Fund was launched on Dec 26, 2007. It has delivered a return of 11.9 percent since its inception. In other words, if someone had invested ₹10,000 at the time of launch, the sum would have grown to ₹53,644 by now.
Also, if someone had made a regular investment of ₹13,000 since the scheme’s launch, it would have grown to ₹63,44,201 by now.
The key constituent stocks of the fund scheme are Cummins India, ABB, Federal Bank, City Union Bank, Trent, Navin Fluorine International, Cholamandalam Investment & finance, Indian Bank, Max Healthcare,, Pl Industries, Crompton Greaves Consumer, Ashok Leyland and CreditAcess Grameen.
