CAGR Calculator
Calculate the Compound Annual Growth Rate of any investment or mutual fund.
Frequently Asked Questions
What is CAGR?
CAGR (Compound Annual Growth Rate) represents the smoothed annual growth rate of an investment over a given period, assuming profits are reinvested.
What is the difference between CAGR and absolute return?
Absolute return is the total % gain (e.g., 150%). CAGR is the annual rate that achieves that total gain (e.g., 20.11% per year for 5 years). CAGR is better for comparing investments of different durations.
Why is CAGR used instead of simple average return?
Simple average ignores compounding. A fund that goes +100% one year and -50% the next has a 25% simple average but 0% CAGR (you're back to where you started). CAGR gives the accurate picture.
What is XIRR in mutual funds?
XIRR extends CAGR to handle irregular cash flows (like SIPs). It's the annualized return for investments made at different dates. CAGR is simpler and works perfectly for lump-sum investments.
What is a good CAGR for mutual funds in India?
Nifty 50 has delivered ~12-14% CAGR over 20+ years. Top flexi-cap / midcap funds have delivered 14-18% CAGR. Anything above 12% over 10+ years is considered excellent.
Can CAGR be negative?
Yes. If the final value is less than the initial investment, CAGR is negative, indicating a loss on an annualized basis.