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8.35How to compare historical returns

1What is it?

Compare funds of the same category using CAGR over the same periods (1, 3, 5, 10 years) and rolling returns (returns over every possible 3- or 5-year window).

2Why does it exist?

Point-to-point returns depend heavily on start and end dates. Rolling returns show consistency.

3Calculation
CAGR = (End NAV ÷ Start NAV)^(1/years) − 1
  1. NAV ₹50 → ₹100 in 5 years.
  2. (100 ÷ 50)^(1/5) − 1 ≈ 14.9%.
5-year CAGR ≈ 14.9%.
4Quick revision
  • Same category, same periods.
  • Use CAGR and rolling returns.
5Knowledge check
Q1. Why compare within a category?Show answer

Different categories have different risk and return.

Q2. What are rolling returns?Show answer

Returns over every possible window of a fixed length.

Q3. NAV ₹10 → ₹20 in 3 years. CAGR?Show answer

≈ 26%.

See it live on MojoStox

More in Level 8: Mutual Funds: Complete Beginner to Advanced