SIP Calculation on Liquid funds

  1. When I check “How much SIP made in Liquid fund” there is two profit showing in result.
  2. Absolute profit
  3. Internal rate of return.

Can you please explain what is difference in both , which one should i consider while checking SIP return.

One more thing When I check SIP return of “LIC MF Liquid Fund - Direct Plan - Growth” Fund on both in Coin and Money control for same period of time. It should different result.

  1. In COIN : SIP return is 1.62% for 1Jan-2017 to 16-June-2017 , investing 5000 each month.
  2. Money Control portal it shows "SIP Investment Returns (CAGR*): 6.83%*"
    http://www.moneycontrol.com/mutual-funds/nav/lic-mf-liquid-fund-direct-plan/sip-calculator-MJB172.html

Which one should I check/consider or I am doing something wrong while analyzing this fund.

I am very new in stock/fund, it might be very silly question for you but please help to understand this better.

Absolute return is the over all return - for example you invested 100 which over 5 years has becomes 185, then the absolute return over 5 years is 85%. But if you want to know how much the investment grew every year, you should look at CAGR (or IRR). For this example the CAGE works out to 13.09%. Any investment exceeding 1 years, you should always look at CAGR or IRR.

Money control is showing CAGR which matches with the IRR we show on Coin. The 1.65% that you see is absolute return.

1 Like