Nippon India Growth Fund: Over 110 X return since inception

Picture courtesy - Freepik

If you had invested Rs 1 lakh in Nippon India Growth Fund in its NFO in October 1995, your money would have multiplied to more than Rs 2.2 crores. Nippon India Growth Fund is undoubtedly one of the biggest wealth creators for mutual fund investors over the last 25 years or so. The phenomenal wealth creation story of Nippon India Growth Fund boosted confidence of retail investors in equity mutual funds in general and midcap funds in particular.

The fund has continued its strong performance even in the last 10 years of so. If you had invested Rs 1 lakh in Nippon India Growth Fund 10 years back, your investment would have multiplied to Rs 4.5 lakhs (16% CAGR).

Strong performance in different periods

Nippon India Growth Fund is a midcap equity mutual fund scheme. The strong performance of this scheme over time can be attributed to bottom up stock picking approach of the different fund managers of this scheme, focusing on individual midcap stocks which later turned out to be multi-baggers. The bottom up approach worked wonders for Nippon India Growth Fund and the scheme has given nearly 22% CAGR returns since inception.

The chart below shows the returns of Nippon India Growth Fund versus its benchmark, scheme category and other asset classes over different trailing time-scales (ending 8^th February 2023). Please note that returns over time periods exceeding 12 months have been annualized. You can see that the scheme was able to outperform the benchmark and category over most time-scales.

Mutual Funds - Returns of Nippon India Growth Fund versus its benchmark, scheme category and other asset classes over different trailing time-scales

Source: Advisorkhoj Research

One of the most consistent performers over the last 7 years

Nippon India Growth Fund has consistently been ranked in the top 2 quartiles in 6 out of the last 7 years. Performance consistency is one of the most important attributes of top performing mutual funds in our opinion. The consistent outperformance of Nippon India Growth Fund versus its peers can be attributed to the stock picking approach of the fund manager and the research capabilities of Nippon India Mutual Fund. The chart below shows the quartile ranking performance of Nippon India Growth Fund over the last 10 years or so.

Mutual Funds - Quartile ranking performance of Nippon India Growth Fund over the last 10 years or so

Source: Advisorkhoj Research

Rolling Returns of Nippon India Growth Fund

The chart below shows the 3 year rolling returns of Nippon India Growth Fund versus the benchmark Nifty Midcap 150 TRI over the last 20 years. You can see that the scheme had consistently outperformed the benchmark most of the times. The scheme went through a period of underperformance during the period from 2014 to 2017, but has again been performing since then.

Mutual Funds - 3 year rolling returns of Nippon India Growth Fund versus the benchmark Nifty Midcap 150 TRI over the last 20 years

Source: Advisorkhoj Research

Mutual Funds - Nippon India Growth Fund went through a period of underperformance during the period from 2014 to 2017

Source: Advisorkhoj Research

Let us now see the 3 year rolling returns of Nippon India Growth Fund versus midcap funds category over the last 5 years. You can see that the scheme has consistently beaten the midcap fund category rolling returns average.

Mutual Funds - 3 year rolling returns of Nippon India Growth Fund versus midcap funds category over the last 5 years

Source: Advisorkhoj Research

Phenomenal wealth creation through SIP

The chart below shows the returns Rs 10,000 monthly SIP in Nippon India Growth Fund over the last 20 years. The current market value of the SIP is nearly Rs 2 crores with a cumulative investment of just Rs 24 lakhs. The SIP XIRR of Nippon India Growth Fund over the last 20 years was 18%.

Mutual Funds - Rs 10,000 monthly SIP in Nippon India Growth Fund over the last 20 years

Source: Advisorkhoj Research

Why invest in Nippon India Growth Fund?

The Nifty Midcap 150 TRI has corrected by about 5% in the last 2 months. Based on earnings outlook the forward valuations of midcap stocks look reasonable for long term investors. Economic growth recovery, government spending on infrastructure, signs of private sector capex recovery and shift from unorganized to organized sectors will benefit stocks in the midcap segments. Nippon India Growth Fund has a strong track record of wealth creations and generating alphas for investors across market cycles.