Mutual Funds: Monthly SIP of ₹4,000 in this value scheme since inception would have grown to ₹1 crore

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mutual fund’s past performance gains a lot of significance. And at the time of examining the past returns, it is advisable to check the historical returns of a number of years and compare them holistically over a period of time to gauge the possibility of returns one can earn in future. ALSO READ: Mutual Funds: Small, mid cap funds saw massive surge in folios in March Here, we randomly select one value mutual fund — Tata Equity P/E Fund — which has delivered healthy returns in the past 19 years across different time periods, particularly via systematic investment plans (SIP) investment.

Let us first understand what a value fund is. These mutual funds refer to the schemes which follow value investment strategy, with at least 65 percent investment made in stocks. These funds identify stocks that are currently undervalued but are expected to perform well over time as the value is unlocked.

Additionally, contra funds are equity mutual funds that take a contrarian view on the market. As per the SEBI guidelines, a mutual fund house can offer either a contra fund or a value fund, not both. (Source: Tatamutualfund.com, AMFI) As we can see in the table above, investing in this mutual fund gave 49 percent in the past one year.

This means if someone had made a regular investment of ₹4,000 every month via SIP, it would have grown to ₹59,000 by making a total investment of ₹48,000. Likewise, if an investor had continued with this SIP for a period of three years, the investment would have swelled to ₹2.19 lakh by making an investment of ₹1.44 lakh. ALSO READ: Mutual Funds: How to check KYC status and what actions you might need to take? A step-by-step guide Moving forward, if an investor had continued with the SIP for a period of