Rolling returns vs trailing returns

When we look to invest in a mutual fund, we tend to check its past performance. We have two particular return calculations, a trailing return and a rolling return. These help us understand the fund's performance and compare it against the benchmark and its peers. Let's understand both these metrics in detail. A trailing return measures returns between two dates. They are also known as point-to-point returns since you are looking at performance between a starting date and an end date. It shows a snapshot of the mutual fund at a specific point in time. This metric can be used to measure returns year-to-date, one year, three years and so on. Trailing returns can also be calculated from the current date from the fund's inception date. If we look at the formula, trailing returns are dependent on two price points, the current NAV and the starting NAV. For example, a five-year trailing return is the annualised difference between today's NAV and the NAV which w

This article was originally published on June 29, 2022, and last updated on October 27, 2022.