New Delhi: Scores of people are opting to invest in mutual funds. Mutual fund managers utilise investor funds to invest in a variety of assets including equities, debt options, and securities. Equity funds, categorised into small, mid, large, flexi, hybrid, etc., carry higher market risk compared to debt funds. However, over the long term, equity funds are often favored for their growth potential. Let’s see what a Rs 10,00,000 lump sum investment in mutual funds would yield during 12 years period.
Mutual Funds performance
For new investors considering making a lump sum investment, evaluating the long-term past performance of a fund is crucial. Although past performance does not guarantee future returns, it provides insights into the fund’s stability. Despite market fluctuations over the past decade, several equity funds have demonstrated exceptional performance, with some delivering more than 10 percent returns over that period.
How much amount investor will receive?
If the total investment amount is Rs 10 lakhs over a 15-year investment horizon, with an assumed rate of return of 12% and an inflation rate of 6%, the corpus is estimated to be Rs 54.74 lakhs. When accounting for inflation, which eroded the value of money over time, the adjusted total corpus amounted to Rs 22.84 lakhs. This illustrates both the nominal growth and the real value of the investment considering inflationary effects over the years.
No fixed rate of return
It’s important to understand that these calculators are designed for illustrative purposes and do not reflect actual returns. Mutual funds do not provide a fixed rate of return, and accurately predicting future returns is not possible due to the inherent variability of market conditions and investment performance. Therefore, while these tools can help estimate potential outcomes based on assumptions, they should not be relied upon as guarantees of actual investment results.
(Disclaimer: This article is only meant to provide information. News9live.com does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)
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Mutual Funds investment calculator: Mutual funds do not provide a fixed rate of return, and accurately predicting future returns is not possible due to the inherent variability of market conditions and investment performance Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
