Mid Cap Money Multiplier: Nippon India Growth Fund: While investing for retirement or big future goals, it is very important to choose the right scheme. Equity funds are considered a much better investment option for wealth creation in the long term. Midcap funds are especially known for high returns. One such mid cap mutual fund scheme is Nippon India Growth Fund. Which has remained a mid cap money multiplier by giving huge profits to its investors since its launch. Be it lump sum investment or SIP investment, this nearly 3 decade old scheme has left no stone unturned in making investors rich. We will explain further the calculation of how this scheme converted a monthly SIP of just Rs 1000 into a fund of more than Rs 3 crore, but before that let us know all the important things about this scheme.
Special features of Nippon India Growth Fund
Nippon India Growth Fund is a mid cap fund, which mainly invests in mid cap stocks. The main objective of this fund is to achieve capital growth in the long term.
– Fund inception: 8 October 1995
– Long term CAGR: 23.14% (since launch)
– 5 year CAGR: 31.62%
– 1 year CAGR: 52.94%
– Scheme Benchmark: NIFTY Midcap 150 TRI
– Risk Level: Very High
– Minimum investment: Rs 100
– Expense Ratio: 1.59% (Regular), 0.79% (Direct)
– Assets under management (AUM): Rs 33,707 crore (as on August 31, 2024)
– Exit Load: 1% if redeemed or switched within 1 month of allotment, nothing thereafter.
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Return Calculation: How a fund of Rs 3.18 crore was created?
- Lump sum investment: Rs 10,000
- Monthly SIP: Rs 1000
- Investment period: 29 years
- Total investment in 29 years (SIP+lump sum): Rs 3.58 lakh
- Current Fund Value: Rs 3,17,84,753 (approximately Rs 3.18 crore)
Investment of Rs 1 lakh becomes more than Rs 4 crore
Nippon India Growth Fund has consistently given excellent returns since its launch. Its Compound Annual Growth Rate (CAGR) so far has been 23.14%. According to the company, if someone had made a lump sum investment of Rs 1 lakh in it at the time of launch, then its fund value on August 31, 2024 would have been Rs 4,11,31,350 i.e. more than Rs 4 crore.
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Investment Strategy of Nippon India Growth Fund
The investment strategy of this fund focuses on investing in mid-cap companies, which have the potential to earn higher profits in the future. The focus of the fund is to identify market leaders who can deliver good returns in the long term. This fund follows the strategy of investing at the right price (Growth at Reasonable Price – GARP). Which means identifying growth stocks at cheap prices and investing in them.
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Nippon India Growth Fund Portfolio
As of August 31, 2024, 97.27% of Nippon India Growth Fund’s portfolio was in equities and 2.73% in cash & cash equivalent assets.
Top holdings of the scheme
– Power Finance Corporation: 3.26%
– Cholamandalam Financial: 2.61%
– Voltage: 2.59%
– Persistent Systems: 2.57%
– The Federal Bank: 2.31%
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For whom is the scheme suitable?
This scheme is suitable for those investors who want capital growth in the long term and do not hesitate to invest in equity. The riskometer of the fund shows “Very High Risk”, which means this scheme is suitable for investors who can tolerate higher risk in the hope of better returns. Those interested in this scheme should be prepared to invest for at least 7 to 10 years.
(Disclaimer: The purpose of this article is not to give advice on investing in any fund, it is only to provide information. Take any investment decision only after taking the advice of your investment advisor.)
