Understanding CAGR and XIRR can help investors make more informed investment decisions and assess the performance of their mutual fund investments. Download Free E-book to get more insights on CAGR and XIRR in Mutual funds.

1. Investment Sahi... Future Sahi...
How to
How to
Calculate?
Calculate?
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2. CAGR and XIRR are important metrics
for measuring mutual fund
performance.
CAGR measures annualized growth
assuming constant rate, while XIRR
considers timing and amount of all
cash flows.
Both are calculated using formulas,
and XIRR requires software.

3. CAGR measures annual growth rate
of an investment over a specific
period of time.
It is expressed in percentage and
helps investors understand the
average rate of growth.
CAGR is useful for comparing the
performance of different mutual
funds over a similar period of time.

4. If you invested Rs. 10,000 in a mutual
fund and after five years, your
Investment grew to Rs. 18,000,
then your CAGR for the five-year period
would be:
CAGR = (Ending Value / Beginning Value)
^ (1 / Number of Years) – 1
CAGR = (18,000 / 10,000) ^ (1 / 5) – 1
CAGR = 12.47%

5. XIRR measures the performance of
mutual fund investments.
It considers cash inflows and outflows,
including the timing and amount of
investments and redemptions.
XIRR is expressed in percentage and
provides an overall return on
investments.

6. let’s say you invested Rs. 10,000 in a
mutual fund on 1st January 2018.
After one year, on 1st January 2019, you
invested an additional Rs. 5,000. On 1st
January 2020, you redeemed Rs. 5,000
from your investment.
Finally, on 1st January 2021, you redeemed
the entire investment of Rs. 10,000. The
XIRR for this investment would be:
XIRR = -10,000 + 5,000 / (1 + r) + 5,000 / (1 +
r) ^2 + 10,000 / (1 + r) ^3
Where r is the XIRR that we are trying to
calculate.
By using the IRR function in Excel, we can
calculate the XIRR as:
XIRR = 14.74%

7. CAGR is useful for comparing the
performance of different mutual
funds over a specific period of time.
CAGR doesn't consider the timing and
amount of investments and
redemptions.
XIRR is useful for determining the
overall return of an investment,
taking into account cash inflows and
outflows over time.
XIRR is particularly useful when you
have made multiple investments and
redemptions in a mutual fund.
CAGR & XIRR

8. Understanding CAGR and XIRR can
help investors make informed
investment decisions and assess
mutual fund performance.
These metrics can help investors gain
a better understanding of the returns
they are receiving.
By using CAGR and XIRR, investors
can make more educated investment
decisions in the future.

9. Mutual fund investments are subject to market risks, read all scheme realted documents carefully
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