Compounding Magic: ?1 Lakh Investment Multiplies to ?16 Lakh in 18 Years

Compounding Magic: ?1 Lakh Investment Multiplies to ?16 Lakh in 18 Years
The magic of compounding, often hailed as the 'eighth wonder' by Albert Einstein, has been exemplified in the remarkable journey of an investment. Taking a closer look at Nippon India Value Fund, a randomly selected value mutual fund, reveals the extraordinary growth potential through the power of compounding.
Launched on June 8, 2005, Nippon India Value Fund, following a value investment strategy with a minimum of 65 percent equity investment, has consistently delivered impressive returns over the years. As of November 30, 2023, a ?1 lakh investment made in this fund 18 years ago would have grown exponentially to ?16 lakh.
The fund has demonstrated a commendable performance, with a return of 25.53 percent in the past year, 26.6 percent in the past three years, and 18.72 percent in the past five years. For instance, an investment of ?1 lakh in the scheme would have yielded ?1.25 lakh after one year, ?2 lakh after three years, and ?2.36 lakh after five years, based on the mentioned returns.
Remarkably, if the same investment had been made in the Nifty 500, the growth would have been comparatively lower at ?12 lakh.
The top 10 constituent stocks of Nippon India Value Fund include HDFC Bank, ICICI Bank, Infosys, Angel One, L&T, PFC, NTPC, Bharti Airtel, RIL, and Max Financial Services.
It is essential to note that this story is for informational purposes only, and individuals are advised to consult a SEBI-registered investment advisor before making any investment-related decisions.