What Will be the Value of ₹5,00,000 Lumpsum Investment After 25 Years?

Equity mutual funds have become a go-to choice for investors aiming for long-term wealth creation. These funds primarily invest in stocks of listed companies, allowing investors to benefit from the growth of businesses and the economy. Whether you are new to investing or planning a future financial goal like retirement, investing early in equity mutual funds can significantly amplify your returns, thanks to the power of compounding.

What Happens When You Invest ₹5,00,000 for 25 Years?

Imagine you invest a lumpsum of ₹5,00,000 in an equity mutual fund and leave it untouched for 25 years. Assuming an average annual return of 12%, which is historically achievable through well-performing equity funds, here's what your investment could grow into:

By simply staying invested, your initial ₹5 lakh has the potential to grow more than 17x, all thanks to disciplined, long-term investing.

Equity Funds vs. Index Funds: How Are They Connected?

Equity mutual funds are a broad category that includes various types of funds that invest in shares of companies. Index funds are a type of equity mutual fund that passively tracks a market index like the Nifty 50, instead of trying to outperform it.

While actively managed equity funds rely on fund managers to pick stocks, index funds simply mirror the composition of the index, offering exposure to top-performing companies with minimal fees and a more consistent performance over the long term.

In short, all index funds are equity mutual funds, but not all equity mutual funds are index funds. If you're looking for an easy entry point into equity investing with the potential for strong long-term returns, the Angel One Nifty 50 Index Fund is a great option.

Also Read: Quant Mutual Fund Launches India’s First Long-Short SIF

Conclusion

Investing ₹5,00,000 in an equity mutual fund today can result in a corpus of over ₹85 lakh in 25 years, without the need for active management or daily market monitoring.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.