What is the 1 year return on index funds?
S&P 500 1 Year Return is at 27.86%, compared to 28.36% last month and -9.30% last year. This is higher than the long term average of 6.70%. The S&P 500 1 Year Return is the investment return received for a 1 year period, excluding dividends, when holding the S&P 500 index.
Attractive returns: Like all stocks, major indexes will fluctuate. But over time indexes have made solid returns, such as the S&P 500's long-term record of about 10 percent annually. That doesn't mean index funds make money every year, but over long periods of time that's been the average return.
| Scheme Name | Plan | YTD |
|---|---|---|
| Motilal Oswal Nifty 500 Index Fund - Direct Plan - Growth | Direct Plan | 6.83% |
| Motilal Oswal Nifty Microcap 250 Index Fund - Direct Plan - Growth | Direct Plan | 7.83% |
| Motilal Oswal S&P BSE Enhanced Value Index Fund - Direct Plan - Growth | Direct Plan | 19.35% |
The average yearly return of the S&P 500 is 10.22% over the last 30 years, as of the end of February 2024. This assumes dividends are reinvested. Adjusted for inflation, the 30-year average stock market return (including dividends) is 7.5%.
A good return on investment is generally considered to be around 7% per year, based on the average historic return of the S&P 500 index, adjusted for inflation. The average return of the U.S. stock market is around 10% per year, adjusted for inflation, dating back to the late 1920s.
According to our calculations, a $1000 investment made in February 2014 would be worth $5,971.20, or a gain of 497.12%, as of February 5, 2024, and this return excludes dividends but includes price increases. Compare this to the S&P 500's rally of 178.17% and gold's return of 55.50% over the same time frame.
In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500, then you would be sitting on a cool $1.2 million today.
Ideally, you should stay invested in equity index funds for the long run, i.e., at least 7 years. That is because investing in any equity instrument for the short-term is fraught with risks. And as we saw, the chances of getting positive returns improve when you give time to your investments.
Most index funds pay dividends to their shareholders. Since the index fund tracks a specific index in the market (like the S&P 500), the index fund will also contain a proportionate amount of investments in stocks. For index funds that distribute dividends, many pay them out quarterly or annually.
Individual stocks may rise and fall, but indexes tend to rise over time. With index funds, you won't get bull returns during a bear market. But you won't lose cash in a single investment that sinks as the market turns skyward, either. And the S&P 500 has posted an average annual return of nearly 10% since 1928.
How much return I will get in index funds?
| Monthly SIP Amount (Rs.) | Expected Rate of Return | Investment Period |
|---|---|---|
| 5000 | 12% | 8 years |
| 10000 | 14% | 10 years |
| 15000 | 10.5% | 12 years |
| 3000 | 11% | 15 years |
S&P 500 1 Year Return is at 27.86%, compared to 28.36% last month and -9.30% last year. This is higher than the long term average of 6.70%. The S&P 500 1 Year Return is the investment return received for a 1 year period, excluding dividends, when holding the S&P 500 index.
| Fund name | AUM (Cr.) | Expense ratio (%) |
|---|---|---|
| SBI Nifty Index Fund | 6,493.78 | 0.18 |
| HDFC Index Fund - S&P BSE Sensex Plan | 6,474.45 | 0.30 |
| UTI Nifty200 Momentum 30 Index Fund | 4,512.99 | 0.46 |
| ICICI Prudential Nifty Next 50 Index Fund | 3,884.57 | 0.66 |
To make $1,000 per month on T-bills, you would need to invest $240,000 at a 5% rate. This is a solid return — and probably one of the safest investments available today. But do you have $240,000 sitting around? That's the hard part.
Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.
Key Takeaways
Investing just $100 a month over a period of years can be a lucrative strategy to grow your wealth over time.
| Discount Rate | Present Value | Future Value |
|---|---|---|
| 6% | $1,000 | $3,207.14 |
| 7% | $1,000 | $3,869.68 |
| 8% | $1,000 | $4,660.96 |
| 9% | $1,000 | $5,604.41 |
A $10,000 investment in Tesla back in April of 2014 would now be worth roughly $121,460 right now -- and that's even factoring in the stock's pullback this year.
How a monthly investment of $300 could grow into $618,900. The S&P 500 returned 164% over the last decade, or about 10% per year. At that pace, $300 invested monthly in an S&P 500 index fund would be worth about $60,000 in one decade, $215,400 in two decades, and $618,900 in three decades.
The result is the number of years, approximately, it'll take for your money to double. For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
How much will $40,000 be worth in 20 years?
As you will see, the future value of $40,000 over 20 years can range from $59,437.90 to $7,601,985.51.
The S&P 500 is all US-domiciled companies that over the last ~40 years have accounted for ~50% of all global stocks. By just owning the S&P 500 you miss out on almost half of the global opportunity set which is another ~10,000 public companies.
According to his math, since 1949 S&P 500 investments have doubled ten times, or an average of about seven years each time.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
Over the long term, index funds have generally outperformed other types of mutual funds. Other benefits of index funds include low fees, tax advantages (they generate less taxable income), and low risk (since they're highly diversified).
