What CAGR means
CAGR stands for Compound Annual Growth Rate. It shows the steady annual return that would turn a starting value into an ending value over a period.
CAGR explained
CAGR is useful, but it is not the full story. Learn how to read it responsibly.
Why CAGR is useful
CAGR makes long-term comparison easier. For example, 3-year, 5-year, and 10-year CAGR can help compare funds within the same category.
What CAGR hides
CAGR smooths the journey. A fund can show good CAGR while experiencing large falls in between. That is why volatility and maximum drawdown should be studied with CAGR.
CAGR vs short-term return
Returns over 1 month, 3 months, or 6 months show recent movement. They should not be treated the same as long-term CAGR for long goals.
How PlanSIP uses CAGR
PlanSIP calculates returns from NAV history where available. If enough historical NAV data is not available, it shows insufficient data instead of inventing numbers.
Educational disclaimer
This guide is for education only. It is not investment advice, tax advice, legal advice, or a recommendation to buy, sell, or hold any mutual fund. Mutual fund investments are subject to market risks. Historical returns do not guarantee future performance.