Mutual Fund Calculator (Lumpsum)






When you invest in a mutual fund, you will naturally be curious about the amount of money, or returns, you will be able to make from your investment. The best and simplest way of going about it is to use our mutual fund calculator. But before using a mutual fund return calculator, it's better to understand the different ways of calculating returns. This way you will be able to gauge how well your mutual fund investment is doing. If the MF calculator finds that it isn't performing according to your expectations, you can always switch over to another scheme.

Mutual Fund Calculator Infographic

Here are some of the ways in which mutual fund investment calculators calculate returns:

Absolute return

This is simply how much money you have made from your investment. For example, if you invested Rs 10,000 in a certain mutual fund and at the end of the year, its value was Rs 11,000, you would have made an absolute return of 10 per cent or Rs 1,000. But of course, you wouldn't need a MF return calculator for that!

Compounded annual growth rate

Another way of calculating returns would be compounded annual growth rate or CAGR. This is somewhat like compound interest. It is used to calculate returns over several years and average them out so that you get a single figure that you can use to find out the kind of returns you're making from your investments. The assumption is that the gains made from the mutual fund investment are reinvested each year and the value of the initial capital invested is thus compounded.

The formula for calculate CAGR is as follows:

CAGR = [(Final value/ Initial value)^(1/ Investment tenure)] - 1

Assume that you have invested Rs 10,000 in a mutual fund for five years, after which its value becomes Rs 20,000. In this case a mutual fund investment calculator would find the CAGR thus:

CAGR = [(20000/10000)^(1/5)]-1 = 14.87%

Internal rate of return

The two above methods work well when you invest a lump sum at a fixed time and want to know how much money it has made during a specified period. But what do you do if you are constantly investing money at different points in time? For example, if you are investing in a Systematic Investment Plan or SIP, where you invest a certain sum each month. So how does a MF return calculator find out the returns you are making from the SIP investment?

In this case, a mutual fund calculator will use a more complex formula called internal rate of return, or IRR. This function can be done in Excel and is called XIRR. This aggregates CAGRs over different time periods to give you one rate of return for all investments.

Benefits of using mutual fund calculator

  1. You don't have to make complex calculations to find out how much money you are actually making. The mutual fund calculator will do all the work for you.

  2. You can get an accurate picture of your investments using the mutual fund investment calculator.

  3. You can make comparisons with mutual funds in the same class or another using the MF calculator. For example, you can find out how returns from your large-cap fund MF is doing compared to other schemes in the same category.

  4. Since it is always accessible, you can use the MF calculator to check returns at any time of your choosing.

Why it is important to make informed choices

There are so many mutual funds in the market today, it is hard to find out which is best for you. Equity, debt, hybrid, small-cap, mid-cap, sectoral... There are also many asset management companies that offer similar products.

While choosing a mutual fund of a certain class - like equity or debt fund -- you have to take decisions based on risk perception and expected returns. For example, an equity fund may give more returns than a debt fund, but the risk could be higher.

While choosing mutual fund schemes of different asset management companies, you have to find one that offers the best returns. There may be considerable differences in the returns on schemes of different companies because of the varying skills of fund managers and the objectives of the AMC. There are many web sites that offer comparisons of mutual fund schemes. You can use any one of them to make the best choice. You can use the mutual fund calculator to find out how your existing investments compare with the others on the market.

Angel BEE offers the best mutual funds for you to choose from. You can download the Angel BEE app to find out the best mutual fund to invest. All the mutual fund recommendations by Angel BEE are backed by ARQ - our hyper-intelligent investment engine which smartly picks out the best funds under various categories such as equity, debt, balanced and ELSS schemes.

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I have a lumpsum amount that I'd like to invest.