5 Types Of Returns In Mutual Funds In 2023

Mar 12th 2024
Mutual Fund
5 Types Of Returns In Mutual Funds In 2023

Types Of Returns In Mutual Funds, In recent times, mutual funds are considered among the top investment options among people of all sorts. Whether you are an intern, a housewife, a business professional, a working executive, or even a middle-age person, mutual funds are meant for every section of the society. And, it is not just the amazing returns they provide, investing in mutual funds in exceptionally easy and quick. One can start investing in mutual funds with as low as Rs. 500 per month to enjoy the benefits of compounding. However, as compared to conventional investment tools like RDs, FDs, Savings Certificates, and others, mutual funds offer better returns than its counterparts. 

Types Of Returns In Mutual Funds

  • Point-to-Point Returns

Also known as absolute returns, point-to-point returns are known to signify the growth and decline in the investment in %age format. It is to note that the different doesn’t take into account the time taken. This way of calculating mutual fund returns is effective for funds with a payment tenure of less than a year. For mutual funds with tenure of 1 year or more, it is recommended to refer to annualized returns.

  • Annualized Returns

The calculation of annualised returns is done on an annual basis. But, it is based on the effect of compounding rate of interest. For instance, if you invest a sum of Rs.1 lakh in a mutual fund which has raised to Rs.1.5 lakh in a period of 3 years. The absolute return stands at 50%, but the annualized return is 125 due to the compounding effect.

  • Trailing Returns

These returns are characterized by an annualized return accrued over a specific trailing period till date. This period can be anything like a year, 2 years, 3 years, etc. Please note the historic data is utilized for a segment of period. A trailing return is considered an extremely powerful way to gauge the overall performance of the mutual fund. By referring to this method, a person can examine a remarkable 10 year period easily on a MS Excel sheet on his own. The return calculating formula for a trailing return in a Microsoft Excel sheet is (Latest NAV / NAV at the start of the trailing period) ^ (1/Trailing Period) - 1.

  • Total Return

Total return can also be termed as actual returns that a person gets against his investment, inclusive of capital gains and dividends. Let’s understand this in detail through this example: If a person has invested a sum of Rs. 1 lakh at a time when NAV was stood at Rs. 20, he invested in 5,000 units of a mutual fund scheme at the NAV (Net Asset Value) of Rs. 20. Then, after a year’s time, the MF scheme's NAV rose to Rs. 22, thereby jumping the value of his fund units to Rs. 1.1 lakh, leading to the total capital gains of Rs. 10,000. The overall dividend paid to the mutual fund investor would be Rs. 10,000 if the fund issued dividends of Rs. 2 per unit all over the year. Subsequently, the investor’s total accumulated return will be Rs.10, 000 + Rs.10, 000 (inclusive of dividend and capital gains) = Rs.20,000. Hence, the overall return or total return would be 20% of the total invested amount. 

  • Rolling Returns

Rolling return basically denote to the annualized returns regard to a mutual fund scheme over a specific time period. The period of rolling returns can be determined daily, weekly or monthly. The same can be utilized till the last day of the period as compared to the scheme’s benchmark like Nifty, CNX - Midcap, CNX - 500, BSE - 200, BSE - Midcap, etc. or fund category (such as midcap funds, large cap funds, balanced funds, diversified equity funds, etc.

The returns coming from mutual funds’ investments having holding periods longer than a year are measured utilizing the compound annual growth rate. This would lessen the funds' net asset value's volatility and short-term swings. This way of computing mutual fund returns makes the assumption that the investment is going up progressively.

The Formula To Calculate Compounded Annual Growth Rate (CAGR) Is:

CAGR = [(Existing Net Asset Value / Initial Net Asset Value) ^ (1/number of years)]-1

Before you looking for the best mutual funds in Delhi to invest in, it is necessary to determine the aforementioned returns that can help you shape up your decision accordingly. How To Calculate Mutual Fund Return? However, the best way is to use a mutual funds return calculator to find out the expected returns out from invested amount. For that, you just need to do is to feed in your basic information like the mutual fund name, chosen plan, the "period for returns and then hit "Calculate". The resultant section would present the absolute returns and annualized returns for the chosen period. A majority of mutual fund calculators also exhibit the performance rank of the mutual fund plan under various fund categories.

Mutual Funds Returns Calculator

The easiest and fastest way to calculate mutual fund returns is to use a mutual fund returns calculator which is made available by a majority of mutual fund companies in India. Below we have highlighted different types of mutual fund returns schemes in India for different schemes. 

Mid-Risk Equity Funds

Fund Name

1 Year

3 Years

5 Years

Aditya Birla SL Frontline Equity Fund (G)

9.47%

10.50%

16.82%

DSPBR Equity Opportunities Fund - Reg (G) 10.67%

10.67%

14.76%

20.18%

Franklin India Bluechip Fund (G)

9.42%

10.29%

18.98%

ICICI Pru Focused Bluechip Equity Fund (G)

13.18%

11.03%

16.78%

Invesco India Dynamic Equity Fund (G)

13.46%

10.59%

15.49%

Invesco India Growth Opp Fund (G)

21.45%

13.34%

19.46%

Kotak Select Focus Fund (G)

8.55%

13.40%

20.77%

Mirae Asset India Equity Fund - Reg (G)

13.44%

13.71%

20.76%

Parag Parikh Long Term Equity Fund - Reg (G)

15.97%

11.44%

N/A

SBI BlueChip Fund - Reg (G)

12.03%

11.50%

18.15%

High-Risk Equity Funds

Fund Name

1 Year

3 Years

5 Years

Aditya Birla SL Equity Fund (G)

11.87%

14.58%

22.11%

Franklin India Prima Fund (G)

9.90%

14.75%

25.91%

Franklin India Smaller Cos Fund (G)

14.04%

17.00%

30.52%

HDFC Mid-Cap Opportunities Fund (G)

12.60%

16.99%

27.09%

ICICI Pru Value Discovery Fund (G)

7.37%

8.24%

21.09%

L&T India Value Fund - Reg (G)

9.08%

16.44%

25.93%

Mirae Asset Emerging Bluechip - Reg (G)

11.25%

20.10%

30.57%

Motilal Oswal Multicap 35 Fund - Reg (G)

13.91%

17.28%

N/A

Principal Emerging Bluechip Fund (G)

15.76%

17.69%

27.54%

Sundaram Mid Cap Fund (G)

10.08%

16.92%

26.87%

Mid-Risk Tax Saving Funds

Fund Name

1 Year

3 Years

5 Years

Axis LT Equity Fund (G)

20.24%

12.38%

23.48%

Invesco India Tax Plan (G)

18.59%

12.88%

20.86%

Franklin India Taxshield (G)

9.90%

10.05%

18.80%

DSPBR Tax Saver Fund - Reg (G)

8.61%

13.70%

20.31%

High-Risk Tax Saving Funds

Fund Name

1 Year

3 Years

5 Years

Aditya Birla SL Tax Relief '96 (G)

18.99%

14.01%

22.60%

Tata India Tax Savings Fund - Reg (G)

12.78%

15.30%

N/A

Theme Funds

Fund Name

1 Year

3 Years

5 Years

Franklin Build India Fund (G)

5.13%

10.42%

24.50%

Franklin India Technology Fund (G)

30.41%

10.90%

18.99%

ICICI Pru US Bluechip Equity Fund (G)

13.74%

8.31%

14.25%

UTI Transportation & Logistics Fund - Reg (G)

15.84%

13.56%

31.75%

FAQs

1. Can I Expect Negative Returns From Mutual Funds?

Yes, this is also possible. Since different types of mutual funds carry different types of returns, investors can also get negative returns if the stock market crashes due to any reason.

2. What Are The Advantages Of Using A Mutual Fund Returns Calculator?

The three main benefits of using a mutual fund returns calculator are:

  • Allow easy financial planning for future
  • Enables investors get a precise idea of their return on investment (ROI)
  • Helps in saving time and avoiding mistakes

3. What Do Direct Mutual Funds Mean?

Direct mutual funds refer to mutual funds that are offered straight from the fund house or AMC.

4. Are Mutual Funds Returns Guaranteed?

Since mutual funds are market-linked, they always carry the risk usually associated with stock investment. So, there is no guarantee on mutual funds investment. 

The Conclusion

The role of a mutual fund calculator is quite significant as it helps an investor in several ways. Whether you are investing in mutual funds for short-term or long-term, such a calculator would help you determine different types of mutual fund returns in an easier and quicker way anytime, anywhere. As there are different types of mutual funds in India, don’t forget to calculate their expected returns with InvestKraft online for better decision making. 

 

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