Magic of compounding: Investing ₹1 lakh would have grown to ₹8 lakh in this mutual fund in 10 years

livemint.com:

power of compounding is so profound that it is often referred to as magic. From mutual fund brokers to Warren Buffett – all tend to laud its power. Albert Einstein once famously said that compound interest is the eighth wonder of the world.

More than 100 years later, this is still believed to be a timeless doctrine. The concept is simple: When you accumulate money on a consistent basis, the pace of wealth generation accelerates as the time rolls on. When you invest small amounts on a regular basis, the wealth generation is sluggish in the initial stages, but as the wealth grows in size, the pace becomes faster and faster.

Here we give the lowdown on top performing multi cap mutual funds which have given over 17 percent annualised return in the past 10 years. Multi-cap funds are mutual funds which invest a minimum of 75 percent in equity & equity-related instruments. They invest across stocks of different sectors and segments of the market.

There are four multi cap schemes which have given over 17 percent CAGR return in the past 10 years. These include Quant Active Fund and ICICI Prudential Multicap Fund. (Source: AMFI, data as on Dec 22, 2023) As one can see in the table above, an investment of ₹one lakh in Quant Active Fund would have grown to ₹8 lakh in ten years’ time.

A similar amount of investment in Invesco India Multicap Fund would have fetched a return of ₹5.40 lakh in 10 years. Nippon India Multi Cap Fund would have given a return of ₹4.92 lakh by investing ₹one lakh during 10 years. Investing ₹one lakh in ICICI Prudential Multicap Fund would have swelled to ₹4.85 lakh.