Mutual Fund Calculators Calculate Your Returns Long Before They Materialize

Dawn Richard  |


Though not immediately after starting out, every investor wants to know the returns of the mutual funds. The promise of high returns from mutual funds is ought to make anyone curious.

What if I told you that there is no need for an expert to do that. Yes, that is possible and fear not my friend! It doesn't involve advanced maths and perplexing formulas.

Mutual Funds

  • A mutual fund is one of the popular investment vehicles, especially in developing countries like India.
  • It is formulated by pooling money of many investors.
  • A team of professionals (fund managers) picks the “right” stocks to achieve the desired returns.

Mutual Funds Calculator:

  • Mutual funds calculators are used to calculate different aspects of the scheme, especially the returns.

P.S: Don’t whisper DUH!! You can find out about other features of these calculators in this article.

  • As the behavior of stock and bond market fluctuates constantly, there is a need for mutual fund calculator.
  • It seems like there are zillions of mutual funds in the current market. Whether it is a short-term mutual fund or a long-term fund, the investor needs an estimate of the returns.
  • Having a realistic idea of possible returns and corpus will help the investor in making further plans.

Returns Calculator for Mutual funds:

You might have come across mutual funds returns calculators for online on SBI, HDFC, and many other websites.

The details needed to calculate the returns are-

  • Investment type: You should know the type of investment you opted for your mutual fund. There are two types of investments, mainly Lump sum and SIP.
  • Investment Amount: You obviously remember this because you paid for it from your pockets. In any returns calculator, you’ll have the facility to choose the amount in thousands-lakhs.
  • Investment Duration: There are both short-term and long-term mutual funds. The duration ranges from months to years depending on the mutual fund.
  • Expected Rate Returns: The advisors of your fund house usually give an estimate of returns’ percentage. Or else, grab your phone and check out the returns rate of the funds. Go with consistency rather than the recent ones.

Different Types of Returns and Their Calculations:

  • Annualized Return:

It shows the investor how much more can be earned if the annual return is compounded over a period.

You can find an online calculator or use the below formula

Annualized Return = ((Ending value of investment / Beginning value of investment) to the power of (1 / Number years held)) – 1

  • Total Return

Total returns are nothing, but the complete returns gained from a mutual fund including dividends and capital gains.

  • Point to Point Return

As the name suggests, this is a type of annualized return which can be selected from a start date to end date.

  • Annual Return

Annual return refers to the return gained between the 1st of January and the 31st of December of a year. The percentage of increased NAV is the annual return.

  • Compound Annual Growth Rate

It is calculated to determine the returns from mutual funds which have a holding period greater than a year. It is usually preferred as it would minimize the short-term swings in valuations.

You can find an online calculator with the below details:

  1. Initial investment value
  2. Ending Investment value
  3. No periods (months/years)

The fun fact here is, it is equivalent to the annualized return.

Calculating Returns for Lump Sum Investment:

Whenever there is a surplus amount and one decides to invest in mutual funds, lump sum investment is the way. To calculate the returns from lump sum investments in mutual funds, you need to know the below details-

  1. Amount of Investment
  2. Expected Rate of Return P.A.
  3. Duration of Investment

With the above details and an online calculator, you can know the possible returns of your mutual fund at its maturity.

SIP Calculator:

Through Systematic Investment Plan, an investor can invest fixed amounts of money in mutual funds at regular intervals.

It has become the preferred type of investment in the last few years.

With the benefit of compounding, long-term returns and growth, investors expect high returns.

Returns from SIP investment can be calculated using an online calculator. The details you need are:

  1. Amount of fixed money
  2. Monthly/Quarterly
  3. Duration of the fund

Another calculation that could be obtained through SIP calculator is Goal SIP. Through this, an investor can get an idea of how to reach a financial goal through SIP.

Inflation Calculator

Our parents and grandparents usually tell us stories about purchasing candies for 25 paise and 50 paise; sometimes even lesser than that. So where are those paise now in the market? Inflation does this job.

The rate of rising prices of goods and services is called Inflation. The purchasing power of money declines over time because of inflation.

How this affects investment is obvious. The current savings might fail to meet our future needs as their value diminishes over time. Investing in mutual funds is one of the primary ways of saving when one wants to beat inflation.

Equity mutual funds can offer returns in the long term which can keep up with the inflation rate. Nevertheless, it is important that we calculate the possible inflation rate. With that detail, it becomes easy to define our goals, duration, and expectations of returns.

While using an online calculator, you will need the below details:

  1. Value of current expenses
  2. Annual Inflation rate
  3. Time period

Retirement Calculator:

Many investors opt to invest in mutual funds as they gain high returns from them. These funds can be extremely helpful in saving for their golden years.

The Retirement corpus goal is factorized by the current age and retirement age of investor. The details that need to be written down for a retirement calculator for mutual funds are:

  1. Monthly expenses
  2. Current Age
  3. Retirement Age
  4. Life expectancy
  5. Inflation Rate
  6. Current Retirement Savings
  7. The expected rate of returns till retirement

Points to Remember:

  • While calculating the returns, have realistic expectations and correct details of your fund
  • For better corpus, opt for long-term investment in mutual funds
  • The calculated returns will help you understand investment ways better and define your goals.

DISCLOSURE: Doing Long Term Investment.


The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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