Returns on Mutual Funds Investment in India

Ways to Measure Returns

Absolute returns: 

In this scenario, regardless of the length of the investment, the growth that is made with the funds will be fixed. These are typically utilized when figuring out returns for periods shorter than a year.

Annualized Return:

The term "annualized return" refers to the returns that investors earn every year. This type, also known as CAGR (Compounded Annual Growth Rate), is useful for comparing investments with various tenures. The formula is CAGR = [(Current NAV value/Purchase NAV value) (1/number of years)] in mathematics. -1} *100

Total return: 

This includes dividend, interest, and gain-related returns as well as all other returns. Two businesses, X and Y, might both experience the same growth in a given year. However, X has also distributed dividends, demonstrating that X has outperformed Y in terms of performance. If you want to compare the mutual funds overall performance and not simply the price change, use this method.

Return to point of origin: 

Point-to-point returns, which are annualized returns between two points, are referred to as such. To compute this amount, you must take into account the beginning and ending dates of the mutual fund scheme.

Rolling Returns:

Generally speaking, rolling returns involve calculating returns on a monthly, weekly, or daily basis. Due to its lack of bias toward a specific time frame and use of the CAGR formula to calculate returns, it efficiently gauges return.


Frequently Asked Questions

1. What is the Indian mutual fund industry's average rate of return?

Depending on the kind of mutual fund you choose to invest in, the typical return rate will vary. Since there are various kinds of mutual funds, their returns vary according to the assets and goals they invest in. Index funds, for instance, offer returns that are fairly close to those of indices like the Sensex and the NIFTY, whereas equity funds offer larger returns but greater risk than index funds.

Q2. Which mutual funds in India offer the highest return?

Based on your risk tolerance and objectives, mutual funds are typically a better option to examine. However, equities mutual funds typically offer one of the highest returns due to their aggressive attitude and ability to outperform inflation. However, they also carry the greatest risk and require lengthy investment.

Q3. Which mutual fund is the safest?

The mutual funds with the lowest risk are another approach to define the safest mutual fund. Select funds that invest in municipal bonds, government bonds, and short-term investments while looking for the safest fund.

Q4. Which mutual fund is the top-ranked one in India?

In India, there is no such thing as the best mutual fund because there are so many different types and varieties accessible for all different types of investors. The ideal mutual fund for you will rely on your unique requirements.

Conclusion

Since mutual funds offer the benefit of being diversified, both new and seasoned investors believe that they are a safer alternative to invest in. If you're still unsure, research which mutual funds or stocks are better for you. There are many different kinds of mutual funds available, and due to the wide diversity, there is no one best mutual fund that provides the best return. Based on numerous elements like the underlying assets and investing goals they support; each fund is distinct. It is therefore advised that you conduct your due diligence before making a decision. For any kind of investor, Fi has a variety of funds available, and picking the funds to invest in is simple because all the information you need is given to you in plain, jargon-free language!

Location: India

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