Understanding Compound Annual Growth Rate and It’s Benefits
What is Compound Annual Growth Rate?
The Compound Annual Growth Rate is an important metric that measures the average rate of return on an investment over a specified period of time, typically expressed as a percentage. This metric is widely used by investors and financial professionals to evaluate the growth of an investment and compare it to other investments over the sametime period.
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Understanding Net Asset Value and Its Importance in Analysing Performance
Net Asset Value in Mutual Funds: Does it Matter for Analysing Performance?
When it comes to investing in mutual funds, one of the key metrics that investors often look at is the Net Asset Value. NAV is calculated by dividing the total value of all the cash and securities in a fund's portfolio, minus any liabilities, by the number of outstanding shares. In simple terms, NAV represents the market value of a single share of a mutual fund.
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What are Benchmarks and why are they important?
The Significance on Benchmarks in Investing:
The benchmark is an important concept in the world of mutual funds. It refers to a standard index or a set of indices against which the performance of a mutual fund is measured. The Securities and Exchange Board of India (SEBI) made it mandatory for fund houses to declare a benchmark index in 2012. This step was taken to bring transparency in the mutual fund industry and help investors make informed decisions.
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