Question 1

How are mutual fund returns calculated?

Accepted Answer

Returns are calculated using CAGR for lumpsum and XIRR for SIP investments to give annualized performance.

Question 2

What is NAV?

Accepted Answer

NAV (Net Asset Value) is the per-unit market value of a mutual fund. Returns are based on change in NAV over time.

Question 3

What is expense ratio?

Accepted Answer

Expense ratio is the annual fee charged by the fund for management. Lower expense ratios mean more returns for investors.

Question 4

What does XIRR mean?

Accepted Answer

XIRR (Extended Internal Rate of Return) calculates annualized returns for irregular cash flows like SIP investments.

Question 5

Which type of mutual fund gives the highest returns?

Accepted Answer

Equity funds typically offer the highest long-term returns, but with higher risk. Debt funds offer lower but more stable returns.

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