To achieve better returns on your investments, it’s essential to approach investing with a strategic mindset. The market offers a variety of investment opportunities, but the key to success lies in selecting options that align with your financial goals and risk tolerance. By making informed decisions and maintaining a disciplined approach, you can potentially secure significant long-term gains. One effective strategy is to explore mutual funds that have a track record of delivering strong returns over time. These funds are designed to grow your money by investing in a diversified portfolio of assets, including stocks, bonds, and other securities. The power of compound interest plays a vital role in this growth.

Unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on both the principal and the accumulated interest from previous periods. It means your investment has the potential to grow exponentially as the interest earned itself begins to generate additional interest. One mutual fund that exemplifies this potential is the ICICI Prudential Asset Allocator Fund. This fund has demonstrated consistent performance over the years, making it a strong candidate for those seeking long-term wealth creation. To illustrate its effectiveness, consider an example: if you had invested Rs 1 lakh in this fund back in 2003, your investment would have grown to Rs 11.13 lakh by today. This impressive growth represents an annualized return of 12.39 per cent, thanks to the power of compound interest.

This fund has delivered strong performance over the last year, turning an investment of Rs 10,000 into Rs 14,819. Over five years, the same amount has grown to Rs 19,971, effectively doubling your investment. The ICICI Prudential Asset Allocator Fund effectively leverages the strengths of equity, debt, and gold, which has contributed to its impressive long-term returns. This fund becomes even more attractive due to its tax-efficient structure, clear exit load policy and professional management. ICICI Prudential Asset Allocator Fund dynamically changes investments in equity, debt and gold and uses an in-house valuation model to optimize returns. This means that this fund generates three-way returns by investing your money in the stock market, gold and property.

This fund allocates 35 per cent to 100 per cent of its investments in non-debt options, allowing investors to potentially save on taxes while maximizing profits. With changes introduced in Budget 2024, long-term capital gains are now taxed at a flat rate of 12.5 per cent. To benefit from this tax structure, investors need to stay invested in the fund for at least 24 months. Additionally, the fund offers a transparent exit load structure. If units purchased or switched from another scheme are redeemed or switched within one year of allotment, up to 30 per cent of the units can be withdrawn without incurring any fees. This feature provides flexibility, enabling investors to access a portion of their investment without charges in case of an emergency.