CAGR vs absolute return on a mutual fund factsheet

Absolute return answers "how much in total"

If a fund moves from ₹100 to ₹150, the absolute return is 50%, whether that took two years or seven. Factsheets and marketing tiles sometimes show a period return that looks large because the window is long. Absolute return is honest about the total change and silent about pace.

CAGR answers "what yearly rate compounds to that"

CAGR spreads the same start and end values across N years as a constant annual growth rate. It is a smoothing device, not proof the fund earned that rate every year. A fund that rocketed then slept can show the same CAGR as one that grew steadily. Still, CAGR lets you compare a three-year and a five-year span more fairly than raw absolute percentages.

Point-to-point CAGR also ignores your SIP dates. Your personal XIRR can differ from the fund's published CAGR.

How to use the calculator with a factsheet

Pick the start NAV (or corpus) and end NAV for the same plan, count the years (including fractions if you work that way), and run the CAGR calculator. Compare with the factsheet's period returns. If a one-year absolute number is pasted next to a five-year CAGR without labels, slow down—those are different questions. Past CAGR is not a forecast for the SIP you start tomorrow.