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Mutual Fund: THIS 10,000 Monthly SIP can return 8.4Lakhs in 4 Years

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Mutual funds allow investors to diversify their portfolios without selecting individual stocks or bonds.

As a rate of return, medium to long-term mutual funds can offer rates between 12 percent and 30 percent per year.

An example is an open-ended equity scheme that primarily invests in small-cap equities — Tata Small Cap Fund.

The scheme’s investment goal is to provide long-term capital growth primarily via investments in equity-related instruments of small-cap firms.

Tata Small Cap Fund was introduced on November 12, 2018, and it has completed its first four years.

A monthly SIP of Rs 10,000 would now have created a corpus of Rs 8.39 lakh — with an annualized return of 30.65 percent since its inception.

Performance of Tata Small Cap Fund

With a 16.18 percent return over the last year, compared to the Nifty Smallcap 250 TRI index’s 4.50 percent return,

a monthly SIP of Rs 10,000 would have grown a total investment of Rs 1.20 lakh to Rs 1.30 lakh.

Compared to the Nifty Smallcap 250 TRI index’s performance over the past three years,

which was 29.75 percent, the fund has produced an annualized SIP return of 34.89 percent.

As a result, a monthly SIP of Rs 10,000 would have taken a total investment of Rs 3.60 lakh to Rs 5.90 lakh.

Since its inception, it generated an annualized SIP return of 30.65 percent compared to the performance of the Nifty Smallcap 250 TRI index of 25.50 percent.

Hence a monthly SIP of Rs 10,000 would now have turned a total investment of Rs 4.70 lakh into Rs 8.39 lakh.

Critical details of Tata Small Cap Fund

The fund is benchmarked against Nifty Smallcap 250 TRI, and as on October 31, 2022, the fund has an AUM of Rs 2,664.24 crore and an average monthly AUM of Rs 2,623.36 crore.

As of October 31, the fund’s NAV was Rs 24.7869 for the direct option and Rs 22.9871 for the regular option.

The fund has an expense ratio of 0.29 for the direct plan and 2.20 for the regular option.

The fund has top 10 sector allocation of Capital Goods, Services, Financial Services, Fast Moving Consumer Goods, Chemicals, Healthcare, Automobile, Auto Components,

Consumer Durables, Consumer Services, Textiles, Construction, Construction Materials, Oil, Gas, And Consumable Fuels, Media Entertainment Publication, and Information Technology.

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