Glossary· Returns
What is CAGR?
Also known as Compound Annual Growth Rate
The steady yearly rate that would have taken the start NAV to the end NAV.
Used for every period of a year or more (1Y, 3Y, 5Y, 10Y, since inception). It smooths the path away: two funds with the same 5Y CAGR can have had wildly different rides, which is what the risk figures are for.
For the formula and the constants behind this figure, see Methodology.
Guides that use CAGR
6 guides put this term to work.
- How do mutual funds actually make money?The three doors return arrives through — appreciation, income, realised gains — and why all of them land in the NAV, net of costs you never see billed.
- The magic of compounding: why starting early beats starting bigMost of the wealth arrives in the final stretch, from money contributed decades earlier. The worked example where five times the contribution still finishes behind.
- Absolute, CAGR, XIRR: which return are you looking at?Three numbers that all answer “how did it do?” and disagree with each other. Which one your statement shows, which one this site shows, and when each is the honest one.
- Rolling returns, and the start date that flatters a fundA trailing return runs from one day to one day, and moving either changes it. What sliding that window across the whole history shows that a single figure cannot.
- Recency bias: why investors keep buying at the topThe industry's entire product cycle is built on it — themes launched after they run, tables ranked by past return, money arriving at the peak.
- Case study: a 20-year SIP through every crashComputed from a real index fund's NAV history: ₹24.5 lakh became ₹86.75 lakh at an XIRR of 11.18% — after being down 39% three years in.
More on returns
What the fund made, and over what stretch of time.
- NAV
- The per-unit price of the fund, published once each business day.
- Absolute return
- Plain point-to-point growth over a period under a year, not annualized.
- YTD
- Return from 1 January of the current calendar year to the latest NAV.
- Rolling returns
- The same holding period measured from every possible start date, not just today's.
- Since inception
- Annualized return over the fund's whole available NAV history.
- XIRR
- The annualized return of a series of cash flows on different dates.
- Benchmark
- The market index a fund's mandate says it is trying to beat.