Difference between absolute and annualised returns

Summary: Ever scratched your head over mutual fund returns that seem to shift depending on how you look at them? This story breaks it down super simply. You'll see why knowing both types makes you a sharper investor. Have you ever looked at your mutual fund statement and wondered why the returns look impressive one way but more modest another? Returns in mutual funds come in two flavours: absolute and annualised. Understanding both helps you make smarter decisions as an investor. Absolute returns simply measure the percentage growth from your initial investment to its current value, regardless of time taken. For instance, if you invested Rs 1 lakh two years ago and it's now Rs 1.5 lakh, that's a straightforward 50 per cent abso

This article was originally published on May 06, 2022, and last updated on February 26, 2026.