Investing in a mutual fund for a long time can lead to much higher returns, especially in the later years compared to the early years. This is because the returns earned in the beginning are reinvested, which helps the investment grow faster over time — a concept known as the “power of compounding.”
For example, let’s look at the HDFC ELSS Tax Saver mutual fund. If someone had started Rs 1000 monthly SIP 28 years ago, it would have turned into Rs 1.9 crore by October 2024. Over the last 28 years, the fund has registered an annual SIP return of 22.89%.
Talking about lump sum investment, Rs 1 lakh invested in this fund in March 1996 would have grown to an impressive Rs 1.36 crore today. Since its inception, the fund has given an annualised return of 18.84%.
Also read: Mutual Fund: Rs 10,000 SIP in this fund gave Rs 46 lakh in just 11 years
HDFC ELSS Tax Saver Fund return since launch
Since its launch on March 31, 1996, this fund has grown by a remarkable 23.89%.
As of August 31, 2024, the fund manages assets totaling Rs 16,422 crore. This significant asset base indicates a strong level of trust from investors and showcases the fund’s ability to attract and retain capital over the years.
The expense ratio of the fund stands at 1.70% as of August 31, 2024. This relatively moderate expense level reflects the fund’s commitment to maintaining cost efficiency while aiming to deliver value to its investors.
HDFC ELSS Tax Saver Fund features a well-diversified portfolio, with its top holdings including ICICI Bank (9.66%), HDFC Bank (9.27%), and Axis Bank (7.87%), highlighting a strong focus on the banking sector.
Additionally, it invests in Cipla (5.44%) and HCL Technologies (5.34%), offering exposure to healthcare and technology. This strategic mix aims to balance growth potential while managing risk effectively.