How mutual fund return is calculated

Q&A: Questions & Answers Portfolio Q&A
1

Hello ,

I am new to investing in mutual fund and when i take past history of mutual funds it show some thing like this 1yr 10% return 2 year 15% return and third year 12% return … Some thing like this .

My doubt is if i take my investment in one year i get 10% return that’s understood … But if i take money after 3 years what returns do i get …( Do i get 12% return of total investment or i get cumulative percentage or how do we calculate ) pls help

2

The returns that you see for more than one year is CAGR. So if 2 year return is 15% then it’s compounded every year at 15^ for 2 years. .