CAGR Calculator India — Compounded Annual Growth Rate 2026

How the CAGR Calculator India Works

CAGR reference table — growth from ₹1 lakh to different final values

How CAGR Is Calculated and Why It's the Standard for Investment Comparison

CAGR (Compounded Annual Growth Rate) is defined as: CAGR = (Final Value / Initial Value)^(1/n) − 1, where n is the number of years. It represents the constant annual return that would take an investment from its initial value to its final value over the specified period, assuming compounding. No actual investment delivers exactly the same return every year — CAGR is a smoothed representation that makes cross-comparison possible.

Worked example: A portfolio worth ₹5 lakhs in June 2016 grew to ₹18 lakhs by June 2026 (10 years). CAGR = (18/5)^(1/10) − 1 = (3.6)^0.1 − 1 = 1.1368 − 1 = 13.68%. This 13.68% is the single number that summarises a decade of ups (FY21's 73% Nifty return) and downs (FY20's -26% Nifty return) into a comparable benchmark.

SEBI requirement for fund fact sheets: Under SEBI (Mutual Funds) Regulations, 1996, and SEBI's advertising guidelines for mutual funds, all fund houses must disclose CAGR returns for standardised periods — 1-year, 3-year, 5-year, and since inception — in scheme factsheets and advertisements. This standardisation means you can directly compare two funds' 5-year CAGR even if you are viewing them on different dates, as long as both are computed as of the same date (typically month-end).

The limitation of CAGR — path independence: CAGR says nothing about how the returns arrived. A fund with a 12% CAGR over 10 years might have earned +50% in year 1 and -20% in year 2, or smoothly returned 12% every year. The volatility, maximum drawdown, and sequence of returns are invisible to CAGR. Two funds with identical 10-year CAGR can have dramatically different risk profiles. Always look at CAGR alongside standard deviation or Sharpe ratio for a complete picture.

Three CAGR Applications That Show When Numbers Deceive and When They Reveal

Scenario 1: Comparing two large-cap funds over different time periods

Roshan is deciding between two large-cap funds. Fund A: invested ₹1L in 2018, now worth ₹2.8L in 2026 (8 years). Fund B: invested ₹1L in 2020, now worth ₹1.9L in 2026 (6 years).

Absolute returns: Fund A = 180%, Fund B = 90%. Fund A looks like a clear winner. But CAGR tells a different story: Fund A CAGR = (2.8)^(1/8) − 1 = 1.137 − 1 = 13.7%. Fund B CAGR = (1.9)^(1/6) − 1 = 1.113 − 1 = 11.3%. Now Fund A leads by a smaller margin, and we can see that 2020–2026 (Fund B's period) included the Covid crash and recovery — making Fund B's 11.3% in that volatile period respectable. CAGR normalises for time; absolute return does not.

Scenario 2: Residential property vs equity mutual fund — the CAGR reality check

Anand bought a 2BHK in Bengaluru for ₹45L in 2014. By 2024, his property is valued at ₹90L — a 100% absolute return. His colleague Preeti put ₹45L in a Nifty 50 index fund in 2014. By 2024, it's worth approximately ₹1.47 crore (at 12.6% CAGR over 10 years — actual Nifty performance in that period, verify exact figure).

Property CAGR: (90/45)^(1/10) − 1 = 2^0.1 − 1 = 7.18%. Index fund CAGR: approximately 12.6%. The property doubled in absolute terms but earned 7.18% annually — comparable to a bank FD or PPF, not an equity alternative. This CAGR comparison is important because property feels like it appreciated dramatically while actually earning modest annualised returns. The CAGR comparison also ignores property's ancillary costs: maintenance (1–2%/year), registration and stamp duty (4–8%), broker fees (1–2% each side), and illiquidity premium.

Scenario 3: Portfolio CAGR calculation — what your actual investor return is

Kavya made three investments: ₹3L in a mid-cap fund in 2019 (now ₹7.2L), ₹5L in a large-cap fund in 2021 (now ₹8.5L), and ₹2L in a debt fund in 2023 (now ₹2.34L). What is her portfolio's overall CAGR?

She cannot simply average the three CAGRs: Mid-cap: (7.2/3)^(1/7) − 1 = 13.4%. Large-cap: (8.5/5)^(1/5) − 1 = 11.2%. Debt: (2.34/2)^(1/3) − 1 = 5.4%. Weighted average by initial investment: (3 × 13.4% + 5 × 11.2% + 2 × 5.4%) / 10 = (40.2 + 56 + 10.8) / 10 = 10.7% approximate portfolio CAGR. True portfolio CAGR should be computed using XIRR on all investment dates, which accounts for timing and amounts more precisely than weighted averaging.

CAGR in Regulations — SEBI Fact Sheet Rules, AMFI Standards, and When to Use XIRR

SEBI mandatory disclosure: SEBI's circular on mutual fund performance disclosure (SEBI/IMD/CIR No.14/187175/2009 and subsequent updates) requires all mutual fund fact sheets, Key Information Memorandums (KIMs), and advertisements to show point-to-point CAGR returns for 1, 3, and 5 years (or since inception, whichever is shorter). These must be computed as of the last business day of the most recent month. SEBI prohibits quoting returns using cherry-picked time periods or CAGR calculations that use dates other than month-end.

AMFI data: AMFI publishes daily NAVs for all mutual fund schemes and calculates standardised CAGR returns at category level. Category-level CAGR data helps investors understand whether a specific fund outperformed or underperformed its category average. AMFI data is freely available at amfiindia.com.

CAGR for lumpsum, XIRR for SIP: CAGR is appropriate only for a single lumpsum investment (one entry point, one exit point). For SIP returns, the correct measure is XIRR (Extended Internal Rate of Return), which accounts for the amount and timing of each SIP instalment. Fund houses and platforms like Zerodha Coin, Groww, and Kuvera typically show XIRR for SIP portfolios. SEBI has proposed (as of 2025) mandatory XIRR disclosure for SIP investors — verify the current status of this requirement with SEBI circulars.

When CAGRs mislead: A fund with 20% CAGR over 3 years may have had 60% in year 1 and near-zero in years 2–3. A 12% CAGR over 20 years (2003–2023) includes the 2008 crash (−52%) and 2020 Covid crash (−38%) — investors who sold during these crashes did not earn the 12% CAGR. CAGR is the return of the investment, not the return of the investor. Investor return (XIRR on actual buy/sell dates) is often significantly lower than CAGR due to timing decisions.

What Investors Get Wrong About CAGR

Using simple average annual return instead of CAGR. If a fund returned +30% in year 1 and −20% in year 2, the simple average is 5%/year. The actual CAGR: starting ₹1L × 1.30 × 0.80 = ₹1.04L → CAGR = (1.04)^(1/2) − 1 = 2%. Simple average overstates returns by not accounting for the compounding effect of losses. CAGR is always lower than or equal to simple average annual return — the more volatile the returns, the larger the difference.

Using fund CAGR (lumpsum basis) to evaluate your SIP XIRR. A fund's fact sheet shows 5-year CAGR of 18%. You have been running an SIP in this fund for 5 years. Your XIRR is not 18% — it depends on which monthly NAVs your instalments hit. If you started the SIP before a market rally, your early instalments may have earned 25%, while recent instalments are flat. Your XIRR could be anywhere from 12% to 24%. Never assume your SIP XIRR equals the fund's disclosed CAGR.

Comparing CAGR across different holding periods without adjusting for risk. A small-cap fund with 20% CAGR over 5 years may have had a maximum drawdown of −52% at some point in that period. A large-cap fund with 13% CAGR over 5 years may have had a maximum drawdown of −24%. Chasing CAGR without understanding the drawdown profile can lead investors to select funds that their behavioural tolerance cannot handle during corrections.

Ignoring the ₹1.25L LTCG exemption when computing post-tax CAGR. A fund showing 15% CAGR over 10 years appears to significantly outperform a 12% return. But at redemption, LTCG at 12.5% (above ₹1.25L per FY, Section 112A) applies to the gains. Post-tax CAGR is closer to 13.5% for the 15% fund and 10.8% for the 12% fund — still a significant difference, but smaller than the gross CAGR comparison suggests. Computing post-tax CAGR requires knowing the accumulated gain, your other capital gains in that year, and the ₹1.25L exemption headroom remaining.