2026

Comments by Deepesh Agarwal
January 2026

The paradox of choice in Indian markets

Investors always like to analyse different mutual funds on various parameters before making an investment decision. Two key factors they look at are the potential for return promised by the scheme and the risk profile. While investors can look at the past performance of a fund to analyse the first factor, they need a tool to measure the volatility of a fund. A popular metric used for this purpose is called beta.

Is it really different this time?

There’s a famous line often attributed to Mark Twain – ‘History doesn’t repeat itself, but it often rhymes’.

Extended Internal Rate Of Return (XIRR) and Compound Annual Growth Rate (CAGR) are two important metrics most investors consider while reviewing the performance of their mutual fund investments. Although both metrics are crucial to track performance, they are used in different scenarios. Hence, for any investor, it becomes essential to understand these metrics to track their portfolio performance accurately.

Now that I have your attention with that clickbait headline, let’s get down to the truth!

If you are planning to invest in mutual funds, then just knowing about a scheme isn’t enough. Whether you are an experienced investor or a beginner, it is important for you to know the various terms and metrics used to measure fund performance. Among the various terms used, trailing returns and rolling returns assess how well a mutual fund has performed over time.

Fixed income funds have delivered strong returns over the past two years as inflation declined sharply from the post-pandemic surge of 2022–23. This disinflationary impulse enabled central banks to pivot decisively towards monetary easing, with 211 and 189 policy rate cuts recorded by global central banks in 2024 and 2025, respectively, well above the post-GFC peak of 181 cuts in 2009 (Source: Bloomberg).