New Delhi, Nov. 28 -- Investment in equity could grow by massive proportions if you stay invested over a long period. When you remain invested for a long time, the returns delivered in the first few years get added to the principal, which increases the scope of returns in the future years.

Here, we handpicked one mutual fund, ICICI Prudential Value Fund, to illustrate how compounding works and how a humble investment of Rs.1 lakh 21 years ago would have risen significantly by now. ICICI Prudential Value Fund was launched on 16 August 2004.

For the unversed, value mutual funds refer to those funds which identify stocks that are currently undervalued but are expected to perform well over time as their value is unlocked.

If someone had in...