New Delhi, May 18 -- When investors look at mutual fund performance, the biggest mistake is assuming that "one return number" tells the complete story. In reality, CAGR, XIRR, and rolling returns measure three completely different dimensions of performance-growth, cash-flow adjusted returns, and consistency. Understanding the difference is essential before comparing funds or making investment decisions.

CA Kinjal Shah, Vice President, Bombay Chartered Accountants' Society, explains this with an example. "CAGR, XIRR and rolling returns measure different things, so using the wrong one can mislead investors. CAGR suits a lump-sum investment because it shows the average annual growth from start to finish. XIRR is better for SIPs because it c...