​CAGR, or Compound Annual Growth Rate, is a measure used to calculate the average annual growth rate of an investment over a specified period, assuming the profits are reinvested at the end of each year. It represents the consistent annual return required for an investment to grow from its beginning value to its ending value over the selected time frame.

CAGR provides a more accurate picture of an investment's performance compared to a simple average return, as it accounts for the effect of compounding. It is especially useful for comparing the performance of different investment options over time by showing the true rate at which an investment has grown annually. Check out our CAGR calculator to explore the world of compounding.

In mutual funds, CAGR is commonly used to evaluate long-term performance, smooth out market fluctuations, and help investors understand the sustained growth potential of a scheme.

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