What is Portfolio CAGR?

Compound Annual Growth Rate (CAGR) represents the consistent annual return required for an investment to grow from its beginning balance to its ending balance. In portfolio tracking, it helps investors understand long-term performance, even with volatile annual returns.

CAGR Formula

CAGR = (Final Value / Initial Value) ^ (1 / Years) - 1

Why CAGR Matters

• Simplifies returns into a single, average annual rate.
• Helpful in comparing investment options and performance.
• Ignores short-term volatility for long-term clarity.

Practical Use Cases

1. Assess mutual fund or equity portfolio performance.
2. Set realistic expectations for future investments.
3. Compare returns from SIPs, PPF, FD, NPS, and more.

Limitations of CAGR

CAGR assumes smooth returns and doesn’t account for irregular contributions or withdrawals. For more complex scenarios, XIRR (Extended Internal Rate of Return) is more accurate.

Conclusion

Use this calculator to gain insights into your portfolio's long-term performance. Whether you are planning for retirement, education, or wealth building, understanding CAGR can guide your investment strategy.