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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Equity funds deliver 22.6% annualized return over 17.5 years

Posted by Muthu on October 17, 2014

As per the below article, equity funds in India has given an annualized returns of 22.6% over last 17.5 years. As always, don’t forget, this period consist of both bull and bear markets.

In absolute terms, 22.6% CAGR over 17.5 years means, wealth multiplying by 35 times.

Investing for long term with patience and ignoring the ups and down of the market really rewards you well.

“Equity mutual funds in India have outperformed CNX Nifty by 10 per cent on the basis of annualised returns the over last 17.5 years, according to Crisil-AMFI equity performance Index.

Equity funds have given an annualised return of around 23 per cent as against 13 per cent by CNX Nifty between April 1997 and September 2014. During the same period, Reliance MF’s equity funds have given annualised return of 24.27 per cent on an average, rating agency Crisil said in a report.

The study was commissioned by Reliance Mutual Fund (RMF).

Among Reliance equity funds, Reliance Growth has given an annualised return of 27.07 per cent and Reliance Vision 23.19 per cent, it said.

“Equity funds in the past 17.5 years have given annualised return of 22.6 per cent. They have generated 10 per cent additional returns when compared to the 13 per cent returns given by the CNX Nifty,” Crisil Research President Mukesh Agrawal said today.

“Overall, equity funds of RMF have given annualised returns of 24.27 per cent during the past 17.5 years, slightly above the industry average of 22.6 per cent,” he said.

“RMF’s composite performance index has grown over 40 times since inception in 1995 and has outperformed the broad market barometer CNX Nifty and Crisil-AMFI Equity Fund Index for one, three, five, 10 and 15-year periods ended September 2014,” said the Crisil study.

RMF, which managed funds valued at more than Rs 2,05,000 crore as on September 30, 2014, has outperformed the market barometers and topped on multiple counts to give better returns to its stakeholders, it said.

The assessment is part of a study done by Crisil that analysed performance of Reliance Equity Composite Index (RECI) comprising 10 actively managed diversified equity funds.

The funds under RECI, including Growth Fund, Vision Fund and Top 200 Fund, among others, managed assets of around Rs 26,000 crore, accounting for 11 per cent of MF industry’s open-ended equity AUM.

“Reliance Growth Fund and Reliance Vision Fund have shown spectacular returns on long-term performance,” Reliance MF Chief Executive Officer Sundeep Sikka said.

“Within the mutual fund our focus will be on retail. We will try to bring more retail investors to the industry.”

There are 50 lakh retail investors on the company’s fold at the moment, Sikka added.”

(Source: http://www.financialexpress.com/news/-equity-mutual-funds-outperformed-nifty-by-10–since-1997-/1298576)

2 Responses to “Equity funds deliver 22.6% annualized return over 17.5 years”

  1. Nishanth Muralidhar said

    Muthu,

    Great to see this. But the real question is , how many investors did hang on to their equity funds for such a long period , through bull and bear markets ? That would be the most interesting point to know.

    Hopefully the next 2 decades prove similar in terms of equity returns.

    • Muthu said

      Dear Nishanth,

      It would be nice if fund houses can publish that data as well. My assumption is that only a few hundred or few thousands would have made such money. The idea of keep writing all these is that I want our clients to be amongst the minority who builds fortune from the stock market.

      Considering our low base, I’m confident that next 20 years would continue to be good as well.

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