Suppose I start a monthly SIP of Rs.1000 in a mutual fund and it gives me 25.33% annualized SIP return after 10 years what does it mean?Does it mean 25.33%/10= 2.533% return per year?
SBI offers RD @ 9.25% for 10years(Source:http://www.statebankofindia.com/user.htm).It appears to be better option if the mf return is 2.533% per year.
I have seen some complex mathematical formula to calculate total return of a mf in some sites.Can anybody explain in layman’s terms?
I know mf investments are not risk free and I am not afraid to take it.My concern is if it is worth the risk?Thanks in advance.