POSTED BY July 9, 2012 3:28 pm COMMENTS (4)ON
I am a bit confused on the terms – annualised return and absolute return used in Mutual funds.
The reason for the above is that I was just going through the fund performance of HDFC Balanced fund in moneycontrol and found that certain returns that are stated are not clear to me.
To give you an example:
Annualised return is stated as:
1 year : 0.9
2 year : 7.9
3 year : 18.2
5 year : 12.3
Absolute return is stated as:
2011 : -10.8
2010 : 24.5
2009 : 71.7
2008 : -36.9
2007 : 26.8
By doubt is if the annualised return has never been in negative then how come absolute return for 2011 and 2008 is stated in negative.
Request you to please clarify my doubt.
(Note : For this example I am considering say a lump sum investment of 1 lakh in Jan 2007)