The whole idea behind doing a systematic investment plan ( SIP) in an equity mutual fund (MF) scheme is to make a large corpus through small regular investments. So in this article, we will discuss how to grow small mutual fund investments.
Mutual fund investment: How to grow small Mutual fund investments
Those who have been patiently investing through Systematic investment plan (SIP) in Mutual fund (MF) schemes over the once five years have already realized its worth output eventuality as their investments have other than doubled due to the market rally this year.
According to investment experts, one should continue their Systematic investment plan (SIP) for the long- term, like 15 to 20 years, irrespective of market trend.
Still, one can fluently decide on an annualized accretive return of 12% for the entire investment period if a Systematic investment plan (SIP) continues 15-20 years.
Worth mentioning then’s that one should Norway fear when the market fall and stop their Systematic investment plan (SIP).
Instead, they should make a lump sum investment to get additional units at lower NAV, which would help boost their overall mutual fund (MF) investment returns.
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For example, if you invest Rs 4 lakh lump sum in a diversified equity Mutual fund (MF) scheme after markets substantiation a 10% correction and continue a month’s Systematic investment plan (SIP) of Rs 5000 in the same fund for the coming 10 years.
Also, the value of your Rs 10 lakh investment (Rs 4 lakh lump sum Rs 6 lakh through SIP) over the period of 10 years will grow to over Rs 24 lakh at a predicted CAGR of 12%.
Farther, if you stay invested in the fund for 15 years, the same investment will grow to approximately Rs1.32 crore, believing you get a CAGR of 12 for the entire 25 years.
Still, the corpus will be much more significant if you continue the Systematic investment plan (SIP) for the entire 25 years period after making a lump sum investment of Rs 4 lakh.
In this case, you can earn a total wealth of Rs1.80 crore (your lump-sum investment will grow to Rs 85 lakh, and your Systematic investment plan (SIP) will increase to Rs 95 lakh).
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