Mutual Fund: How a ₹1 Lakh Investment Turned into ₹40.70 Lakhs

Regardless of the intensity of market volatility, remaining invested in mutual funds over the long term yields substantial returns. Today, we are going to tell you about one such fund that transformed a mere investment of ₹1 lakh into ₹40.70 lakhs. This fund—the ICICI Prudential Equity and Debt Fund—is an open-ended, aggressive hybrid scheme. It primarily invests in equity and fixed-income securities.

This translates to a Compound Annual Growth Rate (CAGR) return of 15.11%.

Launched on November 3, 1999, this fund typically allocates 65%–80% of its assets to equities and 20%–35% to fixed-income instruments. This allows investors to participate in the growth of the equity market while simultaneously benefiting from the stability and income provided by debt securities. The hybrid structure enables the fund to dynamically adjust its asset allocation based on market conditions, all while maintaining its growth-oriented investment objective. As of February 28, 2026, a lump-sum investment of ₹1 lakh—made as an initial investment in 1999—has grown to approximately ₹40.70 lakh. This translates to a CAGR return of 15.11%. Over three- and five-year periods as well, the fund has delivered CAGR (Compound Annual Growth Rate) returns of 19.53% and 18.87%, respectively. During this same period, its benchmark—the CRISIL Hybrid 35+65 Aggressive Index—performed at CAGR rates of 14.12% and 11.75%, respectively. In terms of SIPs, a monthly investment of ₹1,000—started since inception—has grown to ₹4.02 crore, whereas the actual invested amount totaled only ₹31.6 lakh. Even over shorter timeframes, SIP returns have remained robust, delivering CAGRs of 18.15% and 11.85% over five and three years, respectively. Across all these time horizons, the fund has consistently outperformed its benchmark—the CRISIL Hybrid 35+65 Aggressive Index—demonstrating the effectiveness of its dynamic equity-debt allocation strategy in generating encouraging risk-adjusted returns.

How Such Strong Returns Were Achieved

This fund adopts a diversified and flexible investment approach, investing across various market capitalizations and sectors. As of February 28, 2026, the scheme's net equity exposure stood at approximately 76%. The remainder of the capital was invested in high-quality fixed-income instruments. Within the equity segment, the portfolio is primarily allocated to large-cap companies, alongside selective investments in mid-cap and small-cap stocks aimed at enhancing long-term growth potential. In the realm of debt funds, this fund focuses on high-quality instruments rated AA and above—including corporate bonds, government securities, and other fixed-income instruments. This approach... This approach facilitates the generation of stable income while maintaining portfolio quality and managing downside risk.

Who is this investment best suited for?

This fund adopts a combination of top-down and bottom-up investment approaches. Sector allocation decisions are guided by the macroeconomic outlook, valuation considerations, and growth potential, while individual stock selection focuses on identifying fundamentally strong companies characterized by sustainable earnings growth and reasonable valuations. This diversified approach enables the fund to capitalize on opportunities across various sectors while managing volatility.