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Mutual funds: SIP or Systematic Investment Plan makes it easier for the long term investors to accumulate whopping amount even if they don't have enough in-hand savings. So, mutual funds SIP suits to those who are in the nascent phase of their career and they have more than 30 years for investing. But, if chosen with due diligence, an investor's SIP will start generating stellar returns from the medium term it self. Equity Linked Saving Scheme (ELSS) mutual fund JM Tax Gain Fund - Direct Plan is a glaring example of it. This ELSS mutual fund plan has delivered 12 per cent annual return over 5 years, beating category return in this period of 10.94 per cent.
Mutual fund return
In last two years, this ELSS mutual fund plan has yielded 27.45 annual return and 62.45 absolute return. In last three years, JM Tax Gain Fund - Direct Plan has given around 16 per cent annual return whereas it has given around 56.20 per cent absolute return in this period. Similarly, in last 5 years, this mutual fund plan has delivered little over 12 per cent return beating the category return of 10.94 per cent in this period. This mutual fund plan was incepted on 2nd January 2013 and since its inception, this ELSS mutual fund plan has yielded around 15.45 per cent annual return, beating its average category return of 14.15 per cent.
SIP return
If an investor had started monthly SIP of ₹10,000 in JM Tax Gain Fund - Direct Plan, three years ago, its ₹10,000 monthly investment would grown up to ₹4.57 lakh today. If the investor had started monthly SIP of ₹10,000 in this ELSS mutual fund plan five years ago, its ₹10,000 monthly investment would have grown up to ₹8.48 lakh today. Similarly, if an investor had started ₹10,000 monthly SIP in this ELSS plan seven years ago, its ₹10,000 monthly savings would have turned to ₹13.90 lakh today.
JM Tax Gain Fund - Direct Plan has 93.57 per cent exposure in domestic equities out of which 58.82 per cent allocation is in large-cap stocks whereas 22.58 per cent domestic equity allocation belongs to mid-cap stocks.
Mirae Asset Tax Saver Fund - Direct Plan, DSP Tax Saver Fund - Direct Plan, Canara Robeco Equity Tax Saver Fund - Direct Plan and IDFC Tax Advantage (ELSS) Fund - Direct Plan are some of the peers that have also given stellar return to its investors in recent years.