Investment
CAGR
Compound Annual Growth Rate represents the mean annual growth rate of an investment over a specified period longer than one year.
What it means in practice
CAGR smooths out year-to-year volatility into a single annualised number. It assumes one lump-sum investment held for the full period, so it is the right measure for a one-time investment but not for a SIP with multiple cash flows — use XIRR there.
Related terms
XIRR
Extended Internal Rate of Return calculates returns when money is invested or withdrawn at multiple points in time.
Absolute Return
The total percentage change in an investment's value, without annualising.
NAV
Net Asset Value is the per-unit market value of the securities held by a mutual fund scheme.