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Mutual Fund

Last Update 2 years ago

Is GST included in the Mutual fund expense ratio? What does Expense ratio mean? What are open-ended and closed-ended funds? What does Compound Annual Growth Rate (CAGR) mean? What does XIRR mean?

how to calculate my mutual fund returns?

Jainam Broking Limited

Last Update 2 years ago

As an investor, there are various techniques to determine your Return on Investments (ROI), whether it be for a lump sum or SIPs. Some of the techniques for computing returns are listed below, along with examples of situations in which they can be used:

Lump-sum investment for a year or less.

Method to Calculation: Absolute Return

Let's imagine you invested a lump sum of Rs. 3,15,000 on May 28, 2020, and its present value is Rs. 3,95,000. Calculating the absolute return in this situation will provide a realistic picture of your earnings.

Absolute Return % = (Current Value - Investment Value) / Investment Value x 100

= (395000 - 315000) / 315000 * 100

= 25.40%

Without taking the timeframe of the investment into account, the absolute return demonstrates the development of your investment. It is merely the percentage change between your pre-investment and post-investment balances.

CAGR gives you an accurate image of your returns when you make a lump sum investment for a period of time longer than a year. The compound annual growth rate, or CAGR, is the steady rate of growth that would have occurred had the investment compounded annually at the same rate.

Click here for more information on CAGR.

CAGR = [(Current Value / Investment Value)^(365/Number of Days)] - 1

= [(325000/275000)^(365/425)] - 1

= 0.1543 [15.43%]

SIP for less than a year

Method of Calculation: XIRR (Extended Internal Rate of Return)


SIP for greater than a year.

Method of Calculation: XIRR


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