ICICI Prudential Value Fund and HSBC Midcap Fund have completed 22 years of operations, turning Rs 5 lakh investments into over Rs 2.2 crore. These funds demonstrate the impact of long-term compounding, though investors should note that both carry high risk and operate with different investment strategies.
In a milestone that highlights the effect of long-term compounding in Indian markets, two prominent mutual fund schemes, ICICI Prudential Value Fund and HSBC Midcap Fund, have completed 22 years since their inception in August 2004. Both funds have delivered significant returns for investors who remained invested through multiple economic cycles.
The ICICI Prudential Value Fund, which held assets under management (AUM) of Rs 61,102 crore as of July 31, 2026, has seen a lump-sum investment of Rs 5 lakh at inception grow to approximately Rs 2.33 crore. This fund operates on a value-investing strategy, seeking companies that the manager believes are undervalued compared to their true business potential. This approach requires patience, as the market may take time to recognize the value of these companies, often leading to periods where the fund performance may differ from broader market trends.
Similarly, the HSBC Midcap Fund has reached a similar milestone, with a Rs 5 lakh investment at launch growing to roughly Rs 2.26 crore by July 31, 2026. With an AUM of Rs 15,578 crore as of the same date, the fund focuses on mid-sized companies. Mid-cap funds typically invest in companies that are smaller than industry giants but have high growth potential. While these stocks can offer higher returns during market upswings, they also carry greater volatility compared to large-cap stocks.
For investors, these long-term performance figures serve as a reminder of the power of staying invested. To put the growth in perspective, the Nifty 50 Total Returns Index, often used as a benchmark for the broader market, turned a smaller investment into approximately Rs 20.1 lakh from an initial Rs 1 lakh over the same 22-year period. However, it is important to remember that these high returns come with inherent risks.
Both the ICICI Prudential Value Fund and the HSBC Midcap Fund are categorized as having 'Very High' risk on the SEBI riskometer. Mid-cap stocks, by nature, can swing significantly in value during economic downturns, and value-oriented strategies can sometimes underperform if the market ignores undervalued stocks for extended periods.
When evaluating such funds, investors should focus on more than just past returns. Key monitorables include the fund manager’s track record, the expense ratio (the fee charged to manage the fund), and the consistency of the investment strategy. Market conditions change, and a strategy that worked well over the last two decades may face different challenges in the future. Decisions to invest should be based on individual financial goals and risk tolerance rather than historical performance data alone.