Confused about your mutual fund statements? Let's decode how your ₹10 lakh investment is *really* performing!
First, you'll see 'Absolute Return' – the straightforward profit/loss % on your initial ₹10 lakh. Easy for a quick snapshot, but doesn't tell the full story!
For investments over 1 year, CAGR (Compounded Annual Growth Rate) is key! It annualizes your return. E.g., ₹10L to ₹14L in 3 years is 11.86% CAGR.
Investing via SIPs or multiple transactions? XIRR (Extended Internal Rate of Return) is your best friend. It factors in exact dates & amounts for your true annualized return.
Your net return isn't just CAGR/XIRR. Factor in Expense Ratios (annual fees), Exit Loads (early withdrawal fees), and Taxes (LTCG/STCG) that chip away at your gains.
Don't chase past returns, compare apples to oranges, ignore inflation, or obsess over short-term fluctuations. Focus on long-term goals & consistent performance.
Ready to crunch your own numbers? Use our SIP Calculator at sipplancalculator.in to visualize your growth! For personalized advice, consult a SEBI-registered advisor.