Annual vs Trailing vs Rolling Returns Explained | ET Money

Whenever we invest in financial products like stocks, gold, bonds, or mutual funds, we often start by looking at the past returns. To look into this, there are three main types of returns to consider: Annual Returns, Trailing Returns, and Rolling Returns.

- Annual Returns: This shows the percentage profit/loss over one year. For example, if a mutual fund's NAV was 60 rupees on December 31, 2020, and 100 rupees on December 31, 2021, the annual return would be 66.6%. Annual returns help gauge performance consistency.

- Trailing Returns: These measure the average annual return between two dates, providing a broader picture of performance than just annual returns.

- Rolling Returns: These calculate returns for a specific period continuously, offering a more comprehensive view. They show a range of returns and help understand performance over overlapping cycles.

In summary, each return type serves different purposes. While annual and rolling returns help assess consistency or volatility, trailing returns highlight the compounding effect. Consider all three when making investment decisions.

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📖 CHAPTERS
00:00 Introduction
01:11 Annual Returns
04:24 Trailing Returns
07:04 Rolling Returns
11:29 Summary

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