Calculation of Mutual Fund Return

Mutual Fund Return Formula:

\[ Return = \frac{(NAV_{end} - NAV_{start})}{NAV_{start}} \times 100\% \]

Return (%):

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1. What is Mutual Fund Return?

Mutual fund return measures the performance of a mutual fund investment over a specific period. It calculates the percentage change in Net Asset Value (NAV) from the start to the end of the investment period.

2. How Does the Calculator Work?

The calculator uses the mutual fund return formula:

\[ Return = \frac{(NAV_{end} - NAV_{start})}{NAV_{start}} \times 100\% \]

Where:

\( NAV_{end} \) — Ending Net Asset Value (USD/unit)
\( NAV_{start} \) — Starting Net Asset Value (USD/unit)

Explanation: This formula calculates the percentage return by comparing the change in NAV relative to the initial investment value.

3. Importance of Return Calculation

Details: Calculating mutual fund returns is essential for evaluating investment performance, comparing different funds, and making informed investment decisions. It helps investors understand how their investments are growing over time.

4. Using the Calculator

Tips: Enter both NAV values in USD per unit. The starting NAV must be greater than zero. The calculator will compute the percentage return, which can be positive (gain) or negative (loss).

5. Frequently Asked Questions (FAQ)

Q1: What is NAV in mutual funds?
A: NAV (Net Asset Value) is the per-unit market value of a mutual fund, calculated by dividing the total value of all securities in the portfolio by the number of outstanding units.

Q2: Does this calculation include dividends?
A: This basic calculation only considers NAV changes. For total return including dividends and distributions, you would need to use a more comprehensive formula.

Q3: What is considered a good mutual fund return?
A: Good returns vary by market conditions and fund category. Generally, returns that consistently beat the benchmark index and inflation are considered good.

Q4: How often should I calculate returns?
A: Regular monitoring (monthly or quarterly) is recommended, but avoid making decisions based on short-term fluctuations. Focus on long-term performance.

Q5: Are there different types of mutual fund returns?
A: Yes, including absolute return, annualized return, rolling returns, and risk-adjusted returns. This calculator provides the simple absolute return.