Top Parag Parikh Fund: Rs 10,000 Monthly SIP Grows to Rs 43 Lakh With Over 20% Annualised Returns

The Mutual Fund SIP allows investors to build wealth over a long time. The reason why SIPs are so popular among investors is that they minimize risks related to market volatility through Rupee Cost Averaging (RCA). In the long run, one can build a big corpus through SIPs.

Over the last six months, Indian equities have experienced significant declines, due to which many investors are uncertain whether they should continue their SIP investments or not. As a result, the SIP stoppage ratio surged to 122% in February. This indicates that investors are losing confidence in mutual funds. Because of this, SIP investments dropped to Rs. 25,999 crore in February, the lowest in three months.

Market ups and downs are normal, and investors are advised by experts to stay calm and patient. Being disciplined and patient is the key to success in your Investment journey. As mentioned earlier, SIPs use Cost Averaging, which mitigates risk as it ensures that investors buy more units when prices are low and fewer units when prices are high. The historical data has shown that SIPs perform well in the long term. Over the long term (10 years and above), many funds have delivered annualised returns ranging from 15% to 20% on SIP investments.

Parag Parikh Flexi Cap Fund has delivered an annualised return of 18.62% over 3 years and 33.93% in 5 years. Additionally, over the last 10 years, the fund has delivered an 18.07% annualised return. Since its establishment in 2013, the fund has given a 20.04% annualised return.

In the last 10 years, the fund’s SIP return at an annualised rate was of 20.6%. If you had invested Rs 10,000 per month in this fund through SIP, your total investment would have grown into Rs 35.53 lakh in 10 years.

Parag Parikh Flexi Cap Fund has offered a 20.08% annualised return since 2013 on SIP investments. As a result, a Rs. 10,000 monthly investment in the fund has grown into Rs. 42.80 lakh by 2025.

Advantages of Flexi Cap Fund

• Chance for Higher Returns: With the right strategy, this fund has the potential to give good returns over the long term.
• Flexibility for Fund Manager: The fund manager can invest in any type of company based on market conditions, allowing better decision-making.
• No lock-in Period: Flexi-cap funds do not come with any lock-in period. This gives them the freedom to invest or withdraw money based on their financial goals.
• Diversification: This fund invests in large, medium, and small cap companies, which helps spread risk and make investments safer.

Risks Associated with the Flexi Cap Fund

• Market Fluctuations: As this fund also invests in mid and small companies, its value may rise and fall more during market downturns.
• Expense Ratio: Flexi Cap Funds may have higher expense ratios due to the need for regular trading and rebalancing of the portfolio.
• Fund Manager’s Decisions: The fund’s performance depends entirely on the manager’s strategy, including how much they invest in different sectors.

Who should invest in Flexi Cap Fund?

The Flexi Cap Fund is suitable for investors who seek investment flexibility, as the fund manager can adjust the strategy based on market conditions. It is ideal for long-term investors who can stay invested for at least 7-10 years, allowing their money to grow and benefit from market cycles. Additionally, this fund is a good choice for those who can handle market ups and downs without panic and see market declines as opportunities.

However, It should be noted that past performance does not guarantee future returns. The future is uncertain and cannot be predicted by looking at past returns. The past performance only indicates how a particular fund has performed in past years. The performance of a fund depends on the market changes and the decisions of the fund manager. Investors investing in SIP should maintain patience for the long term.