By: Value Research
Published 18 June 2024
Between 1985 and 2000, the Public Provident Fund (PPF) returns were as high as 12% each year. No wonder, elders guide young earners towards PPF.
According to the Reserve Bank of India (RBI), PPF had Rs 9.4 lakh crore of investor money as of March 2023.
Given the rise of the mutual fund industry in recent years, it’s crucial to compare their returns with PPF. One subscriber's query led us to investigate further.
4. The comparison with mutual funds
Note: Regular growth plans considered. Portfolio value as of May 31, 2024. The returns are pre-tax. In case the monthly NAV was unavailable, the previous month's NAV was used.
Assuming Rs 1,000 invested every month over the last 30 years. (Total amount invested is Rs 3.6 lakh)
Current portfolio value Annualised return % (XIRR) Public Provident Fund (PPF) 16 lakh 8.6 Franklin India Prima Fund 1.9 crore 20.9 Aditya Birla Sun Life MNC Fund 1.3 crore 19.1 Franklin India Bluechip Fund 1 crore 18.2 HDFC Capital Builder Value Fund 96.2 lakh 17.6 Tata Large & Mid Cap Fund 81.9 lakh 16.8 HDFC Large and Mid Cap Fund 54.1 lakh 14.8 Taurus Flexi Cap Fund 49 lakh 14.3 LIC MF Flexi Cap Fund 21 lakh 10 LIC MF Aggressive Hybrid Fund 18.5 lakh 9.4
Even the lesser performing mutual funds have outpaced PPF in the last 30 years.
PPF is a fixed-income, low-risk, government-backed instrument. Meanwhile, mutual funds invest in equity, debt, gold, etc., and carry market volatility risks.
To know why, we suggest you click the link below to read the full story.