Mutual Fund SIP Calculator: When it comes to returns, mutual funds are among the most preferred investment tools after stocks. Individual stocks can expose investors to high volatility risks. Mutual funds, too, are dependent on the performance of their underlying assets, such as stocks, bonds, and commodities, bring a certain degree of risk. While other traditional investment products may offer some degree of assurance with guaranteed or nearly certain returns, mutual fund returns can fluctuate due to the uncertainty in the movement of underlying assets.
Over the past few years, mutual funds have increasingly become a preferred investment choice among retail investors due to the various benefits they offer. There are various types of mutual funds available in the market, and finding a good mutual fund for you depends on several factors, as there is no one-size-fits-all answer. The ideal choice hinges on your financial goals and risk tolerance. Equity funds offer growth potential, debt funds provide stability, ELSS funds offer tax benefits, and ETFs provide diversification. One should choose a fund based on one’s specific needs.
Maximizing wealth through SIP
Investing through an SIP can be a powerful way to build a substantial corpus over time, thanks to the magic of compounding. In this article, we’ll explore how even a modest SIP investment can grow significantly over the long term. We’ll use the example of the Quant Flexi Cap Fund – Direct Plan – Growth, which has delivered impressive returns historically.
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Quant Flexi Cap Fund – Expected returns over 20 years
The Quant Flexi Cap Fund – Direct Plan – Growth has provided an annual return of 26.46% on SIP investments over the past 10 years. We’ll use this historical return rate to project potential future returns for a SIP investment over a 20-year period.
SIP investment details:
Monthly SIP Amount: Rs 3,000
Investment period: 20 years
Assumed annual return: 26.46%
To illustrate the growth of a SIP investment, let’s break down the calculations:
Total investment = Rs 3,000 × 240 months = Rs 7,20,000
Number of months: 20 years × 12 months = 240 months
Annual return = 26.46%
Estimated returns: Rs 2,53,98,839
The estimated future value comes out to be approximately Rs 2,61,18,839.
This example demonstrates how a consistent SIP investment of Rs 3,000 per month can grow to over Rs 2.6 crore over 20 years, thanks to the power of compounding and a high annual return rate.
Please note that the returns mentioned for the Quant Flexi Cap Fund are based on past performance and do not guarantee future returns. Investors should conduct thorough research and consult a personal finance advisor or mutual fund before making any investment decisions.
