Most individuals remain skeptical when investing in mutual funds for the first time because mutual fund investments can be risky decisions. Investing in the wrong funds may take a toll on your investment portfolio and overall financial condition. Especially, newbie investors remain pretty doubtful about whether mutual fund investments will turn out beneficial for them.
If this sounds familiar to you, a reliable mutual fund return calculator can be your guiding light in the dicey world of mutual fund investments. Don't know why to use such a calculator? This article is going to answer your question precisely.
CAGR Calculation
CAGR, or compound annual growth rate, refers to the annualized return rates you may expect on your investments. A CAGR calculator is best for calculating your annualized returns on lump sum investments because it doesn't take multiple cash flows into account.
Such a calculator gives you a simplified idea of how much your mutual fund investment returns will grow over time. Those who prefer lump sum investments over SIPs should use this calculator to ideate their probable returns after a few years to make smarter investment decisions.
XIRR Calculation
XIRR, or extended internal rate of return, helps you predict the returns on investments made at different times. An XIRR calculator helps you calculate the future returns of your SIPs flawlessly. This calculator works accurately for both cash inflows and outflows.
It's difficult to calculate the actual annual return of your SIPs if you have invested in multiple funds simultaneously. An XIRR calculator helps you track that with precision to help you make more informed decisions related to fund selection.
Why Is Using a Mutual Fund Return Calculator Pivotal?
Online calculators that help track your mutual fund returns can be extremely handy in decision-making about which fund to invest in. You come across multiple mutual funds every day, but not all of them are worth investing in as per your goals. An online calculator makes your decision easy and precise by reflecting the performance of the funds you check out. Let's understand how a mutual fund return calculator helps you.
- Such a calculator helps you determine whether your investments will yield returns aligned with your long-term financial goals or not. This helps you rule out specific funds from your watchlist.
- These calculators also help you analyze multiple mutual fund schemes at your convenience. As you get to analyze several funds at the same time, comparing them becomes easy, and you pick the funds that suit your financial plans.
- With such an online calculator, you're never in doubt about how the funds you invested in are performing. The clearer picture you get, the better decisions you make.
Final words
Online calculators to track mutual fund returns are much more than financial tools. They set the tone of what your investments should look like. You get clarity about how much you're actually gaining. So, harness the utility of an online mutual fund returns calculator to make your investments worthwhile.
