Mutual Fund Returns Calculator
Mutual Fund Return Calculator – Calculate Mutual Funds Returns Online
Mutual fund returns refer to the gains or losses earned by investors in a mutual fund over a certain period of time. Mutual fund returns are calculated based on the change in the net asset value (NAV) of the mutual fund units.
There are three main types of mutual fund returns:
- Absolute Returns: Absolute returns are the total percentage change in the NAV of a mutual fund over a given period of time. For example, if a mutual fund’s NAV increases from Rs. 10 to Rs. 12 over a year, the absolute return for the year would be 20%.
- Annualized Returns: Annualized returns are the average percentage return earned by the mutual fund per year over a certain period of time. For example, if a mutual fund generates a return of 50% over three years, the annualized return would be around 14.5%.
- Point-to-Point Returns: Point-to-point returns are the percentage return earned by the mutual fund from one specific date to another. For example, if a mutual fund’s NAV on January 1st is Rs. 10 and on December 31st is Rs. 12, the point-to-point return for the year would be 20%.
It is important to note that mutual fund returns are subject to market risks and can fluctuate widely depending on various factors such as market conditions, economic indicators, and the performance of the underlying securities held by the mutual fund. Mutual fund investors should always consider their investment objectives, risk tolerance, and investment horizon before investing in any mutual fund.
The formula to calculate the return on a mutual fund investment is as follows:
Return = (Ending NAV – Beginning NAV + Dividends) / Beginning NAV x 100
Where, Ending NAV = Net Asset Value at the end of the investment period
Beginning NAV = Net Asset Value at the beginning of the investment period
Dividends = Any distributions or dividends received during the investment period
To explain this formula in simple terms, the return on a mutual fund investment can be calculated by taking the difference between the ending NAV and the beginning NAV, adding any dividends received during the investment period, and then dividing the result by the beginning NAV. This value is then multiplied by 100 to express the result as a percentage.
For example, let’s say an investor purchased mutual fund units at a NAV of Rs. 50 and sold them at a NAV of Rs. 60 after a year, and also received Rs. 2 per unit as dividends during the year. Using the formula above, the return on the investment would be:
Return = (60 – 50 + 2) / 50 x 100 Return = 24%
So, the return on the mutual fund investment would be 24% over the one-year investment period. It is important to note that this is a simplified calculation and does not take into account any fees or charges associated with the investment.