CAGR vs XIRR vs Absolute Returns

Fund fact sheets throw around several return measures. Here's how they differ.

Absolute return

The simple total gain: (End − Start) / Start. Useful for a single lump sum over short periods, but it ignores time, so it can't fairly compare a 1-year and a 5-year result.

CAGR

The annualised, compounded growth of a single lump-sum investment. Best for comparing funds over the same period — which is what this site ranks on.

XIRR

The annualised return when you invest at multiple points in time — for example, a monthly SIP. XIRR accounts for the timing and size of each cash flow, so it's the right measure for your own SIP portfolio, while CAGR is right for comparing the funds themselves.