Mutual Funds Comparison Calculator
Evaluate and compare the potential growth of different mutual funds. This professional tool allows you to input fund performance data, expense ratios, and contribution schedules to visualize long-term wealth accumulation. Analyze risk-adjusted returns and make informed investment decisions based on historical CAGR and volatility metrics.
Comparison Results
Understanding Mutual Fund Comparison
Choosing between mutual funds involves more than just looking at the highest historical return. Investors must consider the net impact of expense ratios, the consistency of compounding, and the total cost of ownership over decades. Our Mutual Fund Comparison Calculator is designed to provide clarity on these variables.
How to Use This Calculator
To get started, enter your initial principal amount and your intended monthly contributions. Next, input the expected annual return for two different funds alongside their respective expense ratios. The calculator automatically subtracts the expense ratio from the gross return to provide an "Expense-Adjusted Return," which is the true growth rate of your money.
The Importance of Expense Ratios
A difference of just 1% in fees might seem negligible over one year, but over 30 years, it can result in hundreds of thousands of dollars in lost gains. This is due to the "cost of compounding," where money paid in fees fails to earn returns for you in subsequent years.
Understanding CAGR and Risk
Compound Annual Growth Rate (CAGR) provides a smoothed annual return figure. While our calculator uses average expected returns, it is vital to remember that equity funds carry volatility. A higher Sharpe Ratio usually indicates a fund that provides better returns for the amount of risk taken.
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