How Do I Calculate Mutual Funds Returns?

As time passes mutual funds have been the popular choice for investors looking to achieve their financial objectives. For starters we’ll go through some memories to see what we can learn. What exactly is mutual funds? A mutual fund is an investment that was created through the pooling of funds collected from shareholders to purchase securities such as bonds or money market instruments, stocks as well as other investments.

They are managed by a team of expert money managers who diversify the fund’s investment portfolio and strive to create profits or capital gains in the form of annual returns. The returns that are based upon the financial performance can be classified as returns from mutual funds.

They invest in a wide range of different securities, ranging from equity to debts. The performance is typically measured by changes in the amount of capitalization in the market of the fund.To know more such interesting things, visit our website TrueScoopnews.


How do you make money from the investments you make in mutual funds? Do you have a tough finding the right formula? Here is everything you need to figure it about.

Different types of Mutual Fund Returns

There are a variety of mutual funds, and their returns differ. If you and a friend purchased Kotak the mutual fund then you would have made a large investment while your friend would have chosen the SIP. In this case, the returns from the mutual fund can alter. Therefore take a look at the kinds of returns offered by mutual funds.

  1. Absolute ReturnsThe absolute or point-to-point returns are the result of the amount of increase or decrease in investment, expressed in terms of percentage. The time taken to make this change isn’t take into account. The method of absolute returns of the calculation of returns is employe when mutual fund have tenure that is less than one year. If the tenure is longer than a year, the investor must determine annualized return.
  2. Total Return:It refers to the actual return you’ve earned from your investment. It includes dividends and capital gains.
  3. Annualized Returns: The term “annualized returns” implies , annualized returns quantify the rate of growth within the amount of an investment on a regular basis.
  4. Trailing ReturnsThis refers to the annualized returns for a particular time period, which is currently ending.
  5. Point-to-Point Return: It’s an annualized, yearly-recorded return recorded with two time points. All you need to know to calculate point-to-point returns is the starting date and closing date of an investment scheme.
  6. Rolling Returns They refer to the annualized returns of the scheme over an extended period of time. The roll-back period can be either weekly, daily or even monthly, and they will be use up to the day that end the period , in relation to what is consider to be the standard of fund or scheme.

How do you calculate the Mutual Fund Returns?

As we have already said, there are a variety of returns that mutual funds can earn. However, at the bottom level, the returns are calculated on two main bases. They can be described as SIP as well as lump sum. We will learn the best way to use both.

How do you calculate Your SIP Mutual Fund Returns?

SIP return on mutual funds work according to the formula below:

P (1+i)^n-1 * (1+i)/i

Here, P = Is your investment.

N = The amount of investment or payment

I = the interest rate (for the duration)

For instance, if you invest at a rate of Rs. 2500 every month for the duration that spans 24 months and you would expect a return of 12%. your I will be 0.01.

This is the way you determine it.

2000 2000 [(1+0.01) 1 – 24 * (1+0.01)/0.01

The final result, which means your earnings are Rs. 54,500.

How do you calculate Your Lump Sum Mutual Fund Returns?

As we have previously discussed the possibility of a lump sum to provide different returns, like absolute and basic annualized yields. When it comes to calculating the return absolute it’s a relatively simple formulathat’s the current NAV (starting NAV) * beginning NAV 100.

NAV is the fund’s net asset value. NAV refers to the Net Asset Value, or the value that is marketable for each unit of the fund.

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Therefore, if you’re starting with the NAV at 25 and at 40, your absolute return would be 60% over less than one year. If your investment is less than one year old and is represented in percentage using absolute returns to calculate the returns.

Simple annualized returns however is calculated with another method, and is referring to the amount you would have earned had you put money into the account for the whole year. The formula is the ratio (1plus the absolute percentage of return)(365/the total number of calendar days)in this scenario. 1. –

You can calculate the average rate of growth for an investment time that is longer than 12 months with the compounded annual rate, also known as CAGR. The formula can be calculated as [(current NAV/beginning NAV)(1/the number of years)]-1 100. You can substitute 1/number of years by 12/number of months when your investment is in months.

Another way to calculate this can be calculate as CAGR = (current value/initial value)1/n-1 where the number n refer to the year.

These two formulas will assist you calculate your mutual fund’s returns by yourself, without the assistance of experts as well as the Internet. It may take some time, but you’ll arrive at the right conclusion once you have all the data you need to input.


It’s a bit confusing to make all these calculations, however the good news is that today you don’t have to perform these calculations manually There are tools for free online to perform these calculations. However, this guide will aid you in your own calculations.

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