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A decade and more of compound growth
One lakh rupees invested in a flexi-cap mutual fund in 2008 would have grown roughly tenfold by 2025. That outcome reflects an annualised return of 14.25% over 17 years, turning ₹1,00,000 into about ₹10,00,000.
How the math works
The growth follows the compound interest formula:
Future value = Principal × (1 + r)n
With a principal of ₹1,00,000, an annual rate (r) of 14.25% and a period (n) of 17 years, the compounding effect produces roughly a tenfold increase in capital.
Why flexi-cap funds can deliver such returns
- Flexible allocation: Flexi-cap funds can invest across large-, mid- and small-cap stocks, allowing managers to shift exposure as opportunities change.
- Long-term compounding: Consistent returns, even with interim volatility, compound significantly over many years.
- Active management: Skilled managers can add value by rotating into sectors or market-cap segments that appear undervalued.
What this means for investors
- Past performance doesn’t guarantee future results, but long-term equity exposure has historically been a driver of wealth creation.
- Starting early and staying invested lets compounding work in your favour. The difference between short-term volatility and long-term growth is often decisive.
- Consider your risk tolerance and investment horizon. Flexi-cap funds suit investors who can accept market swings for potentially higher returns.
Quick takeaways
- A one-time investment of ₹1 lakh in 2008 could have become about ₹10 lakh by 2025 at an annualised 14.25%.
- Flexi-cap funds offer diversification and managerial flexibility, which can help capture opportunities across market cycles.
- Review goals, risk profile and fees before choosing a fund, and remember that discipline and time in the market matter most.