In India, investing in the stock market via mutual funds is quite popular. One popular choice for this is Sensex funds, which track the BSE Sensex. For investors who like to invest a large amount knowing the past performance of Sensex is a crucial criterion. In this blog, we will break down the performance of Sensex funds during the last five years.
Understanding Sensex Funds
Sensex funds are index investments that aim to replicate the BSE Sensex’s performance. The Sensex includes 30 of the Bombay Stock Exchange’s most prominent and powerful companies.
By investing in Sensex funds, investors can get exposure to a variety of these leading companies without picking specific securities, making it a safer and broader proposition for their investment.
When investors want to capitalize on the growing market trend investing in Sensex Funds can be a suitable choice for higher returns.
5 Year Performance Analysis of Sensex Funds
Here is how Sensex funds have performed in the last five years.
Historical Returns
Sensex funds have been very successful during the last five years. The annual returns(5Y) from some well-known Sensex funds are:
● HDFC Index S&P BSE Sensex Direct Plan: 17.32%
● ICICI Prudential Sensex Index Fund: 17.64%
● Tata BSE Sensex Index Fund: 17.15%
These figures demonstrate the impressive performance of Sensex funds, particularly during the post-COVID-19 recovery of the Indian market.
Source: Moneycontrol
5 Year Lumpsum Investment Calculation in Sensex Fund
Investors can calculate the potential return on a lump sum investment by following the way.
For example: If you have invested ₹1,00,000 in a Sensex fund for five years and the investment will have an average return of 13%, then its future value will be.
The formula to calculate the future value (FV) of a lump sum investment is:
FV = PV * (1 + r)^n
Where:
● PV is the Present Value (₹1,00,000)
● r is the annual return rate (0.13)
● n is the number of years (5)
Using these numbers, the calculation looks like this: FV=100000×(1+0.13)^5≈100000×1.842=₹1,84,200
Therefore, if an investor has invested a sum of ₹1,00,000 into a Sensex fund for five years, it will be around ₹1,84,200 at the end of 5 years.
Key Factors Influencing The Performance of Sensex Funds
Sensex funds have done well over the last five years. There are several factors that influence the performance of Sensex funds. Some of them are:
Trends in the Market
The Indian stock market has seen wild swings, influenced by international economic conditions, domestic policy, and investor sentiment. However, Sensex funds have benefited from a promising trend in general.
Economic Revival
Following the epidemic, stock prices rose as a result of increased profits produced by companies. Sensex funds reaped the benefits of this.
Rates of Interest
Sensex funds were popular among investors seeking higher profits in the stock market as a result of lower interest rates.
Government Policies
The government’s initiatives to streamline operations, upgrade infrastructure, and entice international investors have created a more favorable investment climate, which has increased the value of Sensex funds among investors.
Conclusion
Sensex funds have performed well over the previous five years, making them a promising investment for growth. A lumpsum calculator may help an investor in investing wisely and avoid any potential risk. Investors should always examine their financial objectives and risk tolerance before making any investment decision. For lumpsum investing in India, Sensex funds are a good choice for investors looking for higher returns on their investments.
