MulticalcMutual Fund Comparator
Comparison
Enter details for two schemes to compare their potential returns over time.
Understanding Mutual Fund Returns and Comparison
When investing in mutual funds, the headline return figure (CAGR) doesn't tell the whole story. Comparing funds involves analyzing the Expense Ratio, Exit Load, and the impact of compounding frequency. This tool helps you visualize how small differences in these variables can create massive disparities in your final wealth corpus over 10, 15, or 20 years.
How Fees (Expense Ratio) Increase Your Real Cost
The Expense Ratio is the annual fee charged by fund houses to manage your money. It might seem small, but it eats directly into your compound interest. This is why Direct Plans often outperform Regular Plans significantly.
The 1% Difference
A 1% higher expense ratio over 20 years doesn't just reduce your returns by 1%. It can reduce your final corpus by 15-20% due to the lost opportunity of compounding that fee money.
SIP vs. Lumpsum: Real-World Examples
Investors often debate whether to invest a large sum at once (Lumpsum) or stagger it (SIP). Let's compare the outcomes based on historical market behavior.
Scenario 1: The Lumpsum Advantage
Market Condition: Bull Market (Rising)
If the market goes up consistently, investing ₹1 Lakh today (Lumpsum) beats investing ₹10k for 10 months (SIP) because your money stays invested for longer, capturing more growth.
Scenario 2: The SIP Safety Net
Market Condition: Volatile/Bear Market
In a fluctuating market, SIPs help you buy more units when prices drop (Rupee Cost Averaging). This lowers your average cost per unit, often leading to better returns when the market recovers.
How to Compare Mutual Funds Correctly
Don't just look at the last 1-year return. Use these metrics for a fair comparison:
- Rolling Returns: Check consistency over performance. Has the fund beaten its benchmark 70% of the time?
- Alpha: Measures how much extra return the fund generated over the benchmark risk-adjusted.
- Standard Deviation: Shows how volatile the fund is. A lower SD is better for conservative investors.
Frequently Asked Questions
- At 12%: Corpus is ~₹99 Lakhs
- At 13%: Corpus is ~₹1.14 Crores
Important Disclaimer
The calculations provided by this tool are for educational and planning purposes only. Mutual Fund investments are subject to market risks. Past performance is not an indicator of future returns. The computed results are estimates based on the assumed rate of return and do not guarantee actual portfolio performance. Please consult a SEBI registered investment advisor before making investment decisions.
- ✓ Expense Ratio: Lower is better. Direct plans cost ~1% less than regular plans.
- ✓ Exit Load: Check withdrawal penalties, typically highest in first year.
- ✓ Taxation: LTCG tax is 12.5% on gains >₹1.25 Lakh for equity funds held >1 year.
Disclaimer
This tool provides projections based on assumed returns. Actual performance depends on market conditions, fund selection, and market volatility. Consult a certified financial planner before investing.