Question 1

What are rolling returns in mutual funds?

Accepted Answer

Rolling returns measure a fund's CAGR for every possible holding window of a fixed length (e.g. 3 years) across its entire history. Instead of a single point-to-point return, rolling returns show the distribution of outcomes — how often did the fund deliver above 10%? What was the worst 3-year period? This reveals true consistency, not just lucky timing.

Question 2

How is rolling CAGR calculated?

Accepted Answer

For each end-date in the NAV history, we find the NAV exactly W years earlier (using the closest available trading day). CAGR = (End NAV / Start NAV) ^ (1 / actual years) - 1, where actual years is the precise day difference divided by 365.25. This handles leap years and trading holidays accurately.

Question 3

What does the distribution chart show?

Accepted Answer

The histogram shows what percentage of all rolling windows delivered returns in each CAGR band (e.g. 10-15%). A fund with most bars concentrated above 10% and minimal exposure below 0% is highly consistent. A fund with a wide spread — including negative bars — is volatile and entry-date-sensitive.

Question 4

What is a good rolling return for equity mutual funds?

Accepted Answer

For diversified equity funds, a 5Y rolling return above 12% in 80%+ of periods is considered strong. A fund where even the worst 5-year window delivered positive returns is considered very consistent. ELSS and small cap funds often show higher averages but also higher variability — more negative periods in bear markets.

Question 5

Why is rolling returns analysis better than point-to-point returns?

Accepted Answer

Point-to-point returns tell you what happened from one specific date to another — heavily influenced by when you happened to check. Rolling returns eliminate start-date luck. They answer: regardless of when an investor entered, how likely were they to have a good outcome? This is the right question for long-term investment decisions.

Rolling Returns Visualizer