Find your absolute return on a lumpsum mutual fund investment based on NAV at purchase and redemption.
Units = Invested amount ÷ NAV at purchase. Current value = Units × NAV at redemption. Return % = (Current value − Invested) ÷ Invested × 100.
Educational tool only — not investment advice. Markets involve risk; past performance and illustrative math don't guarantee future results.
Net Asset Value (NAV) is a mutual fund's per-unit price, and the simplest return calculation — (Ending NAV − Starting NAV) ÷ Starting NAV — works cleanly for a one-time lump-sum investment held with no additional purchases or withdrawals. But NAV-based return alone starts to mislead the moment a fund distributes gains through dividends (called IDCW — Income Distribution cum Capital Withdrawal — in India's current terminology) rather than reinvesting them internally, because a dividend payout reduces the fund's NAV by roughly the distribution amount without that representing any real loss to the investor — the money simply moved from the NAV into their hands as a payout.
This is exactly why total return (which adds back any distributions paid out to the change in NAV) is the more accurate performance measure than NAV movement alone, especially when comparing a dividend-paying (IDCW) plan against a growth plan of the same underlying fund — the growth plan's NAV will show a higher, unbroken upward trajectory purely because it never pays out and reduces NAV, while the IDCW plan's NAV appears to grow more slowly even though the total value delivered to an investor (NAV growth plus distributions received) may be identical. For any investment involving multiple purchases at different NAVs (like a SIP), CAGR or XIRR — not simple NAV-to-NAV percentage change — is the correct way to measure actual annualized return, since a basic NAV comparison has no way to account for money invested at different times.
Return = (Ending NAV − Starting NAV) ÷ Starting NAV × 100. This works cleanly for a single lump-sum investment held with no additional purchases or withdrawals, but needs adjustment (total return) once distributions or SIP-style periodic investments are involved.
Because the distribution amount is paid out of the fund's assets to unit holders, reducing the fund's per-unit NAV by roughly that amount. This isn't a real loss to the investor — the value simply moved from the NAV into the payout received — but it makes NAV movement alone a misleading measure of actual performance around distribution dates.
A growth plan reinvests all gains internally and never pays out, so its NAV shows a continuous upward trajectory reflecting the fund's full performance. An IDCW plan periodically distributes gains as payouts, which reduces its NAV each time — making the IDCW plan's NAV chart look like slower growth even when total value delivered (NAV growth plus distributions) can be comparable.
Use simple NAV return only for a genuine single lump-sum investment with no other transactions. For a SIP or any investment involving multiple purchases at different NAVs and dates, XIRR is the correct measure, since it properly accounts for the amount and timing of each individual investment — a basic NAV-to-NAV percentage change cannot.