How to use this calculator?
Suppose you’re trying to decide between two mutual funds: Fund A and Fund B. You invested ₹1,00,000 in both of them 5 years ago. Today, Fund A has grown to ₹1,90,000 while Fund B is worth ₹1,70,000. To find out which performed better, you can use this calculator by entering:
Initial Investment Amount: ₹1,00,000 (same for both funds)
Final Value of Fund A: ₹1,90,000
Final Value of Fund B: ₹1,70,000
Investment Duration: 5 years
The calculator will compute and compare the CAGR (Compound Annual Growth Rate) for both funds, helping you identify which fund delivered better returns over time.
This tool is useful when evaluating past performance to make informed choices for future investments.
Mutual Fund Performance Comparison Calculator
This calculator helps investors compare the historical performance of two or more mutual funds based on their beginning and ending values over a fixed period. It calculates and compares the CAGR of each fund, which standardizes returns over time and removes the effect of market timing.
Formula used in this Calculator? With explanation
The comparison is based on the CAGR formula:
CAGR = [(Final Value / Initial Value) ^ (1 / Number of Years)] – 1
Where:
Initial Value: The amount originally invested
Final Value: The value of the investment after a specific period
Number of Years: Duration of the investment
This formula gives you the average annual return of an investment, as if it had grown at a steady rate each year. It’s useful for comparing mutual fund returns over different time frames in a fair and standardized manner.
Understanding the benefits:
This calculator helps remove guesswork when choosing mutual funds. Comparing CAGR gives a clear picture of which fund has consistently performed better over time — instead of just looking at total return or short-term gains.
It enables you to make better decisions based on past performance, especially when building or rebalancing your portfolio. It’s also a helpful tool for long-term planning, since it adjusts for the effect of compounding.
However, past performance is not always an indicator of future returns. This calculator should be used as one part of your fund evaluation process, along with other metrics like expense ratio, portfolio holdings, fund manager history, and risk-adjusted returns.
For a comprehensive investment decision, consider speaking to a certified financial advisor who can guide you based on your individual risk appetite and goals.
Disclaimer:
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