Investing Rs.1 Lakh in this Mutual Fund at Launch Would Have Grown to Rs.36 Lakh in 25 Years
Compounding makes a significant contribution towards the wealth accumulation over time. If money is invested in a stock or mutual fund and held for a long duration, it increases more rapidly in subsequent years than in the beginning years. This is because the interest acquired at first is added to the initial amount, thus causing the investment to grow in the long run. Most seasoned investors value the compounding power and deem it among the optimal means of acquiring riches. To see how compounding operates, one can observe the performance of the ICICI Prudential Equity and Debt Fund, an aggressive hybrid mutual fund that started in 1999. The returns over the years indicate how an investment over a long period can increase tremendously.
Growth of Rs.1 Lakh Investment Over Time
For various periods of time, the return on an investment of Rs.1 lakh in this plan has been appreciable.
The investment would be Rs.1,12,840 in one year with a return of 12.81%. For three years, it would have been Rs.1,60,540 with a return of 17.08%. In five years, the fund would have become Rs.2,60,990, giving a return of 21.13%. In ten years’ time, the investment would have grown to Rs.3,66,838 with a return of 13.88%. Since the beginning of the fund, the investment would have grown to Rs.36,14,200, with an average return of 15.26% per annum. More than 10 years, an investment of Rs.1 lakh in this fund would have turned into Rs.3.66 lakh. Investors who had put Rs.1 lakh when the fund was first launched in 1999 would have had their investment rise to Rs.36.14 lakh in 25 years. But past performance is not a guarantee of future returns. The fact that a mutual fund has performed well in the past does not necessarily mean that it will perform equally well in the future.
About the Mutual Fund
ICICI Prudential Equity and Debt Fund was started on November 3, 1999. The scheme uses CRISIL Hybrid 35+65 – Aggressive Index as its benchmark with Nifty 50 TRI as the additional benchmark. The expense ratio of the scheme is 1.02% for direct plans and 1.60% for regular plans.
As of 31 January 2025, the fund holds assets under management (AUM) worth Rs.39,886 crore. The portfolio is diversified with stocks across industries, with the likes of Samvardhana Motherson International, Maruti Suzuki India, TVS Motor Company, Eicher Motors, ICICI Bank, HDFC Bank, and Ambuja Cement.
Such funds are frequently sought by long-term investors to build wealth, but it is always best to refer to risk factors and market conditions prior to investment.
