{"id":26967,"date":"2026-05-09T11:07:44","date_gmt":"2026-05-09T11:07:44","guid":{"rendered":"https:\/\/wp-api.pocketful.in\/blog\/?post_type=mutual-funds&#038;p=26967"},"modified":"2026-05-09T11:07:45","modified_gmt":"2026-05-09T11:07:45","slug":"annualised-returns-in-mutual-funds","status":"publish","type":"mutual-funds","link":"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/","title":{"rendered":"What is Annualised Returns in Mutual Funds?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">When you start investing in mutual funds, one of the first things you come across is \u201creturns.\u201d And very quickly, another term follows, annualised returns.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At first glance, it sounds technical. But once you understand it, it becomes one of the most useful ways to compare your investments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this blog, let us break it down in a simple way so you can actually use it while making investment decisions.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Understanding_Mutual_Fund_Returns\" title=\"Understanding&nbsp; Mutual Fund &amp; Returns\">Understanding&nbsp; Mutual Fund &amp; Returns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#What_are_Annualised_Returns\" title=\"What are Annualised Returns&nbsp;\">What are Annualised Returns&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Importance_of_Annualised_Returns\" title=\"Importance of Annualised Returns&nbsp;\">Importance of Annualised Returns&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Annualised_Returns_vs_Absolute_Returns\" title=\"Annualised Returns vs. Absolute Returns&nbsp;\">Annualised Returns vs. Absolute Returns&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Formula_for_Annualised_Returns\" title=\"Formula for Annualised Returns&nbsp;\">Formula for Annualised Returns&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Where_to_Check_Annulised_Returns\" title=\"Where to Check Annulised Returns&nbsp;\">Where to Check Annulised Returns&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Things_to_Keep_in_Mind\" title=\"Things to Keep in Mind&nbsp;\">Things to Keep in Mind&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Conclusion\" title=\"Conclusion&nbsp;\">Conclusion&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wp-api.pocketful.in\/blog\/mutual-funds\/annualised-returns-in-mutual-funds\/#Frequently_Asked_Questions_FAQs\" title=\"Frequently Asked Questions (FAQs)\">Frequently Asked Questions (FAQs)<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"h-understanding-nbsp-mutual-fund-amp-returns\"><span class=\"ez-toc-section\" id=\"Understanding_Mutual_Fund_Returns\"><\/span>Understanding&nbsp; Mutual Fund &amp; Returns<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A mutual fund is basically a pool of money collected from many investors, which is then invested in different asset classes like stocks, bonds, gold, etc. This money is managed by a professional fund manager.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These investments then give you returns, which further earn returns, so that your money grows over time.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before jumping into annualised returns, let us quickly understand what \u201creturns\u201d mean.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Returns are simply the profit or loss you earn from your investment. For example, you invest \u20b91 lakh, and after 2 years, it becomes \u20b91.44 lakh<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your total return is \u20b944,000 or 44%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now here is the catch: this 44% does not tell you how fast your money grew each year. That is where annualised returns come in.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-annualised-returns-nbsp\"><span class=\"ez-toc-section\" id=\"What_are_Annualised_Returns\"><\/span>What are Annualised Returns&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Annualised returns tell you the average yearly return your investment has generated over a period of time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead of looking at total growth, it converts the return into a per-year growth rate, assuming the investment grew at a steady pace.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let us understand the concept with a simple example;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Investment: \u20b91,00,000<\/li>\n\n\n\n<li>Value after 2 years: \u20b91,44,000<\/li>\n\n\n\n<li>Total Return: 44%<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Now, the annualised return will tell you the average yearly growth rate. In this case, it is approximately 20% per year, not 22% (which many people assume by dividing 44% by 2).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Annualised returns consider compounding, which means the investment amount earns returns in the first year, and also earns returns in the second year<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, your money grows on both your original investment and your past gains. That is why simply dividing the total return by the years gives an incorrect picture.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-importance-of-annualised-returns-nbsp\"><span class=\"ez-toc-section\" id=\"Importance_of_Annualised_Returns\"><\/span>Importance of Annualised Returns&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-1-helps-compare-different-investments\">1. Helps Compare Different Investments<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Let us say fund A gave 50% return in 5 years, and fund B gave 30% return in 3 years. How will you decide which one is better?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At first glance, Fund A looks better. But when you annualise:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Fund A gives 8.4% per year<\/li>\n\n\n\n<li>Fund B gives 9.1% per year<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Now the picture changes, since annualised returns allow you to compare investments fairly, even if the time periods are different.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-2-shows-the-true-picture\">2. Shows the True Picture\u00a0<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Total returns can sometimes be misleading. For example,60% return over 10 years sounds good, but when annualised, it is only about 4.8% per year, which is barely beating inflation. Annualised returns help you understand the real earning power of your investment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-3-useful-for-long-term-planning\">3. Useful for Long-term Planning\u00a0<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you are investing for goals like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Retirement<\/li>\n\n\n\n<li>Buying a house<\/li>\n\n\n\n<li>Children\u2019s education<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">You need to know how your money grows year by year, not just overall. Annualised returns help you estimate whether you are on track or do you need to work on your investments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Read Also:<\/strong> <a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds-vs-individual-stocks\/\">Mutual Funds vs Individual Stocks: Which Investment Option Is Better for You?<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-annualised-returns-vs-absolute-returns-nbsp\"><span class=\"ez-toc-section\" id=\"Annualised_Returns_vs_Absolute_Returns\"><\/span>Annualised Returns vs. Absolute Returns&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is where many investors get confused.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Absolute returns show total gains or losses, and are considered best for short-term investments (less than 1 year). For example, you invest \u20b91 lakh, and it becomes \u20b91.1 lakh in 6 months. This is 10% absolute return.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-formula-for-annualised-returns-nbsp\"><span class=\"ez-toc-section\" id=\"Formula_for_Annualised_Returns\"><\/span>Formula for Annualised Returns&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>AR = (Final Value \/ Initial Investment)^1\/n &#8211; 1<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Where,\u00a0<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Final value = Value of your investment at the end&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Initial Investment = Amount you invested&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">n = number of years&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-example\"><strong>Example<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let us understand this with an example:&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose you invested \u20b9100,000, and after 3 years it became \u20b9172,800<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If we apply the above formula:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u20b9172,800 \/ \u20b9100,000 = 1.728<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We know that n = 3&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now, Annualised Return will be (1.728)^\u2153 &#8211; 1, which is equal to 20%<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, your investment grew at an average rate of 20% per year, not 72.8%.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-where-to-check-annulised-returns-nbsp\"><span class=\"ez-toc-section\" id=\"Where_to_Check_Annulised_Returns\"><\/span>Where to Check Annulised Returns&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-1-use-investment-apps-or-platforms\">1. Use Investment Apps or Platforms<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you are using apps to <a href=\"https:\/\/www.pocketful.in\/mutual-funds\">invest in Mutual Funds<\/a>, you will find annualised returns in the app itself. Platforms like <a href=\"https:\/\/www.pocketful.in\/\">Pocketful<\/a>, Groww, Zerodha Coin, etc. make it very easy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You just need to&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Open an account with the Pocketful app\u00a0<\/li>\n\n\n\n<li>Search for the mutual fund<\/li>\n\n\n\n<li>Open the fund details, and look for returns. You will see numbers like: 1-year return, 3-year return, 5-year return<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-2-check-the-fund-house-website\">2. Check the Fund House Website<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You can also go directly to the mutual fund company\u2019s website.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>HDFC Mutual Fund<\/li>\n\n\n\n<li>ICICI Prudential Mutual Fund<\/li>\n\n\n\n<li>SBI Mutual Fund<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">On the fund page, look for a section called \u201cPerformance\u201d.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-3-use-financial-websites-for-comparison\">3. Use Financial Websites for Comparison<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you want to compare multiple funds, websites are very helpful. You can check: Value Research, Morningstar, Moneycontrol<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Using these websites, you can compare funds side by side and see long-term annualised returns.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-things-to-keep-in-mind-nbsp\"><span class=\"ez-toc-section\" id=\"Things_to_Keep_in_Mind\"><\/span>Things to Keep in Mind&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-1-always-compare-similar-funds\">1. Always Compare Similar Funds\u00a0<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Make sure you are comparing the same type of funds. For example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Large-cap vs large-cap<\/li>\n\n\n\n<li>Mid-cap vs mid-cap<\/li>\n\n\n\n<li>Debt vs debt<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Comparing a debt fund with an equity fund does not make sense because the risk levels are completely different.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-2-do-not-look-at-just-one-number\">2. Do not look at Just One Number\u00a0<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Annualised return is important, but it should not be the only thing you check. Also, look at consistency over time, riskometer, and expense ratio. A fund giving a steady 11% is often better than one jumping between 20% and -10%.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\" id=\"h-3-try-to-interpret-what-you-are-seeing\">3. Try to interpret what you are seeing<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Keep this simple rule in mind: 1-year return is absolute, and 3-year, 5-year, and 10-year returns are annualised. So do not compare the 1-year return of one fund with the 5-year return of another. This won\u2019t give you the right picture.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Read Also: <\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds-vs-direct-investing-differences-pros-cons-and-suitability\/\">Mutual Funds vs Direct Investing: Differences, Pros, Cons, and Suitability<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion-nbsp\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">At the end of the day, annualised returns help you cut through the noise. Instead of getting impressed by big total returns, you get to see how efficiently your money has actually grown over time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It brings a sense of clarity. You can compare funds better, set more practical expectations, and avoid getting carried away by short-term performance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But always remember to look at consistency, risk, and whether the investment fits your goals. Use it to stay informed, but combine it with logic and long-term thinking. For more market insights and learning, <a href=\"https:\/\/play.google.com\/store\/apps\/details?id=in.pocketful.android\">download Pocketful<\/a> &#8211; offering zero brokerage on delivery, mutual funds, and IPOs through an easy-to-use platform.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">S.NO.<\/th><th class=\"has-text-align-left\" data-align=\"left\">Check Out These Interesting Posts You Might Enjoy!<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>1<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/what-is-an-ipo-mutual-fund-should-you-invest\/\">What Is An IPO Mutual Fund? Should You Invest?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>2<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/taxation\/\">Mutual Fund Taxation \u2013 How Mutual Funds Are Taxed?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>3<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/is-your-mutual-fund-investment-safe\/\">Is Your Mutual Fund Investment Safe?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>4<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/open-ended\/\">What is an Open-Ended Mutual Fund &amp; How to Invest in it?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>5<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/what-mutual-fund-fact-sheet\/\">Mutual Fund Factsheet: Definition And Importance<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>6<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/interest-rates-impact-mutual-funds\/\">How Interest Rates Impact Mutual Funds in India<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>7<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/passive-funds-vs-active-funds\/\">Active or Passive Mutual Funds: Which Is Better?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>8<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/mutual-fund-vs-pms\/\">Mutual Fund vs PMS: Which is Better?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>9<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/fof\/\">What is Fund of Funds (FOF)?<\/a><\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>10<\/strong><\/td><td class=\"has-text-align-left\" data-align=\"left\"><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/best-passive-mutual-funds-in-india\/\">Best Passive Mutual Funds in India<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions-faqs\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3 class=\"\">Is annualised return the same as CAGR?<\/h3><p class=\"saswp-faq-answer-text\">Yes, both mean the same thing in most cases.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">When should I use annualised returns?<\/h3><p class=\"saswp-faq-answer-text\">Use annualised returns when your investment period is more than one year.\u00a0<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Can annualised returns be negative?<\/h3><p class=\"saswp-faq-answer-text\">Yes, if your investment loses money over time.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Do mutual fund apps show annualised returns?<\/h3><p class=\"saswp-faq-answer-text\">Yes, most apps and websites show it clearly.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Is a higher annualised return always better?<\/h3><p class=\"saswp-faq-answer-text\">Not always. You should also look at risk and consistency.<\/p><\/ul><\/div>","protected":false},"excerpt":{"rendered":"<p>When you start investing in mutual funds, one of the first things you come across is \u201creturns.\u201d And very quickly, another term follows, annualised returns. At first glance, it sounds technical. But once you understand it, it becomes one of the most useful ways to compare your investments. In this blog, let us break it [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":27052,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[19],"tags":[],"class_list":["post-26967","mutual-funds","type-mutual-funds","status-publish","format-standard","has-post-thumbnail","hentry","category-mutual-funds"],"acf":{"freelancer":"Harjyot"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.13 (Yoast SEO v21.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is Annualised Returns in Mutual Funds? Meaning, Formula &amp; Examples<\/title>\n<meta name=\"description\" content=\"Learn what annualised returns (CAGR) mean in mutual funds. 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