Definition
Rolling Returns
Rolling returns measure a fund's performance over every possible period of a given length, giving a more honest picture than a single point-to-point return.
Instead of looking at, say, just the last five years' return, rolling returns calculate the five-year return starting from every day or month in the fund's history and average the results. This reveals consistency across different market conditions.
This approach removes the luck of start and end dates, which can flatter or distort point-to-point numbers. For Indian investors, comparing rolling returns helps identify funds that perform reliably rather than those that simply caught one good run.
Related terms
- CAGRCAGR is the smoothed annual rate at which an investment grew over a period, as if it had risen steadily each year.
- Point-to-Point ReturnsPoint-to-point return is the simple percentage gain or loss an investment delivers between two specific dates, ignoring everything that happened in between.
- BenchmarkA benchmark is the market index a fund is measured against, such as the Nifty 50, to judge whether the fund is genuinely beating the market or merely riding it.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.