The power of compounding is so profound that it is called “magic.” And that's exactly what it is! Investors from all walks of life, including Warren Buffett and Charlie Munger, attribute the vast wealth they managed to accumulate over long periods of time to this magic.
Here, to shed light on the power of compound interest, we will share details of one of our mutual fund schemes, Quant ELSS Tax Saver Fund, and the returns it has generated.
The scheme was launched on April 13, 2000. INRThe investment was $100,000 when it launched about 24 years ago. INR3.4 million so far.
Let's take a look at how it works, but first let's understand what exactly is an Equity Linked Savings Scheme (ELSS) Mutual Fund.
What is ELSS Fund?
ELSS scheme refers to a mutual fund that invests at least 80 per cent in equities as per ELSS (2005) notified by the Ministry of Finance.
The fixed period of these schemes is 3 years, which is the shortest among all other tax saving options. Currently, the following are eligible for deduction under Section 80C of the Income Tax Act: INR15,000.
There are 42 open-ended ELSS schemes with total assets under management (AUM) of INR2.04 billion as on January 31, 2024, as per data released by Association of Mutual Funds of India (AMFI).
Quant ELSS Tax Savings Fund
This mutual fund scheme has returned 47% in the past year.This means if someone had invested INRIf you had $100,000 a year ago, your investment would have grown by INR1.47 million.
Similarly, thanks to the CAGR return of 35.20 percent by this mutual fund in the last three years. INR100,000 would have grown INR2.47 million.
Over the past five years, this mutual fund has returned 30.88% annually. this is, INR100,000 would have grown INR384,000,000 in six months.
| tenure | INRAn investment of $100,000 is | return (%) |
| 1 year | 1.47 million | 47.05 |
| 3 years | 2.47 million | 35.20 |
| 5 years | 3.84 million | 30.88 |
| inception | 34.33 million | February 16th |
(Source: Quantmutual.com; Returns as of January 31, 2024)
Finally, with this investment, INRIf the $100,000 is not redeemed and has remained invested since the plan's inception on April 13, 2000, this investment INR34.33 million over the past 23 years.
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The key constituents of the portfolio are RIL, Adani Power, Aurobindo Pharma, Hindalco, Sun Pharma, Jio Financial Services, Britannia, GAIL, BHEL and Grasim.
The sectoral weighting of the scheme consists of financial services (20.9%), metals and mining (15.6%), healthcare (13.1%), power (8.8%) and capital goods (5.3%). The total assets under management (AUM) of this scheme is INRAccording to AMFI data as of February 9, 2024, 753 billion yen.
The fund managers of the scheme are Vasav Sahgal and Ankit Pande.
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