Why CAGR, not simple average
Markets are lumpy: +40% one year, -15% the next. A simple average overstates what you actually earned because it ignores compounding. CAGR answers a cleaner question: what single steady annual rate would have taken your money from its starting value to its ending value over the full period?
For example, if Rs 1 lakh becomes Rs 1.61 lakh in 5 years, the CAGR is about 10% per year, even though no individual year returned exactly 10%.
What CAGR hides
CAGR smooths the ride. Two funds with identical 5-year CAGR can have wildly different volatility, so always read CAGR alongside risk metrics like volatility and max drawdown.
How FindMF computes it
For periods of one year or more, FindMF derives CAGR straight from daily AMFI NAVs: it takes the latest NAV and the NAV exactly N years earlier (anchored to calendar dates, not monthly points), then annualises. We only report 3Y CAGR with 36+ months of history and 5Y with 60+, never on thin data. We earn no commission; the numbers come from published NAVs. See methodology. For SIPs, XIRR is the right measure, not CAGR.