What Is CAGR? Understanding Annualised Mutual Fund Returns

CAGR (Compound Annual Growth Rate) is the steady annual rate at which an investment would have grown to its final value, if it grew at the same pace every year.

Why it's useful Real returns are lumpy — up 30% one year, down 10% the next. CAGR smooths that into one comparable number. Saying "18% CAGR over 5 years" is far more meaningful than "grew 129% in total."

How to read it - 3Y / 5Y CAGR on a fund page tells you its annualised return over that window. - Always compare CAGR over the same period across funds — a 5Y CAGR can't be compared to a 3Y CAGR. - For SIPs, use XIRR instead, since instalments are dated.

Every fund page shows 1Y/3Y/5Y/10Y CAGR computed from real NAV history. Remember: past CAGR describes history, not a guarantee of the future.