As an Investor, we have various options to invest our hard earned money. The ultimate aim for any investment is to create reasonable wealth with peace of Mind.
Equity Mutual Funds have also been available to investors as an investment option, but investors have mixed feelings with respect to returns. The perception for equity MF is generally Negative. We have tried to work on the actual data of Equity MF schemes, which were present 15 years back and have gone through 2 cycles of Bull and Bear markets, and understand if they have been able to do justice to the investor.
LUMPSUM RETURNS
Returns Generated on an investment of Rs.1 Lac over a period of 15 years
|
Scheme Name |
Return CAGR(%) |
Value (In Rs.) |
| Birla Sun Life Tax Advantage Fund-Gr | 21.07 | 17,60,144 |
| Birla Sun Life Tax Relief Fund-Gr | 27.44 | 37,99,308 |
| DSP Black Rock Equity Fund-Gr | 22.22 | 20,27,348 |
| Franklin India bluechip Fund-Div | 26.41 | 33,64,128 |
| Frnaklin India Prima Plus-Gr | 27.13 | 36,60,381 |
| Franklin India Prima Plus-Div | 26.81 | 35,28,037 |
| HDFC Capital Builder Fund-Gr | 21.01 | 17,50,765 |
| HDFC Equity Fund-Gr | 28.66 | 43,92,575 |
| HDFC Taxsaver-Gr | 30.45 | 54,08,212 |
| HDFC Top 200 Fund-Gr | 23.14 | 22,74,324 |
| JM Equity Fund-Gr | 8.94 | 3,61,136 |
| Morgan Stanley Growth Fund-Gr | 17.33 | 10,99,067 |
| Principal Personal Tax Saver | 23.46 | 23,59,798 |
| Reliance Growth Fund-Gr | 27.49 | 38,18,883 |
| Reliance Vision Fund-Gr | 23.02 | 22,36,008 |
| SBI Magnum Multiplier plus 93-Div | 17.71 | 11,54,346 |
| SBI Magnum Tax Gain Fund-Div | 23.18 | 22,81,006 |
| Sundaram growth Fund-Gr | 19.01 | 13,63,733 |
| Tata Ethical Fund-Gr | 20.52 | 16,43,943 |
| Tata Tax saving Fund-Div | 23.99 | 25,16,517 |
| Templeton India Growth Fund- Gr | 19.46 | 14,39,569 |
| Average of all Funds | 22.78 | 24,87,582 |
|
LUMPSUM INVESTED Rs.1LACS |
CURRENT VALUE Rs. 24.87 LACS |
The Funds have delivered an average return of 22.8% in the 15 year period, multiplying investor wealth by around 24 times. 95% of the funds have multiplied the investment by 9 times or more.16 out of 21 funds have delivered more than 20% returns. These returns have come on the Backdrop of close to 0% return delivered by broader indices in the last 5 years.
SYSTEMATIC Investment plan Returns (SIP)
Returns generated on a monthly investment of Rs.10,000 over a period of 15 Years
|
Scheme Name |
Return CAGR(%) |
Value(in Rs.) |
| Birla Sun Life advantage Fund- Gr | 16.54 | 70,48,896 |
| Birla Sun life tax relief 96 Fund-Gr | 21.11 | 1,05,39,858 |
| DSP Black Rock Equity Fund-Gr | 22.12 | 1,15,26,279 |
| Franklin India bluechip Fund-Div | 23.08 | 1,25,50,736 |
| Frnaklin India Prima Plus-Gr | 24.74 | 1,45,44,210 |
| Franklin India Prima Plus-Div | 23.16 | 1,26,40,161 |
| HDFC Capital Builder Fund-Gr | 20.63 | 1,00,64,134 |
| HDFC Equity Fund-Gr | 26.01 | 1,62,13,201 |
| HDFC Taxsaver-Gr | 26.53 | 1,69,81,179 |
| HDFc Top 200 Fund-Gr | 23.72 | 1,32,27,332 |
| JM Equity Fund-Gr | 10.84 | 43,11,789 |
| Morgan Stanley Growth Fund-Gr | 15.70 | 65,50,643 |
| Principal Personal Tax Saver | 18.99 | 87,40,161 |
| Reliance Growth Fund-Gr | 27.81 | 1,91,05,968 |
| Reliance Vision Fund-Gr | 23.71 | 1,32,72,638 |
| SBI Magnum Multiplier plus 93-Div | 19.55 | 91,82,510 |
| SBI Magnum Tax Gain Fund-Div | 22.06 | 1,14,65,139 |
| Sundaram growth Fund-Gr | 17.96 | 79,57,451 |
| Tata Ethical Fund-Gr | 20.15 | 96,82,036 |
| Tata Tax saving Fund-Div | 19.81 | 93,95,644 |
| Templeton India Growth Fund- Gr | 20.56 | 1,00,39,314 |
| Average of All Funds | 21.18 | 1,11,92,342 |
| SIP Rs.10000 per month
Invested Rs.18LACS |
CURRENT VALUE Rs.1.12 Cr |
A monthly investment of Rs.10000 in these schemes through the SIP route from 1Jan 1998 to 31 Dec 2012 has been assumed. Where the best performing fund has created wealth of a staggering Rs.1.91 crore, the SIP in the worst performing fund has also made a healthy Rs.43 Lacs for the investor.
To summarise, I would like to reiterate to all investors that equity is the best performing asset against all the other asset classes in long term. It gives flexibility, risk diversification and is also tax efficient, all at the same time.
Gurleen Kaur is a Financial Consultant and devotes her time to her company www.hareepatti.com. She has done her Bachelors in Finance and Investment Analysis(BFIA) from College of Business Studies(CBS, Delhi) and MBA from IMT, Ghaziabad. Currently she is also pursuing her studies in order to become a Certified Financial Planner.
She can be Contacted at gurleen@hareepatti.greatestdesignever.com
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