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 📊 Why Your Mutual Fund Returns Do NOT Match the Factsheet! 🤯

You log onto a financial platform, see a fund boasting a stellar 30% trailing return, and excitedly open your portfolio dashboard... only to find your actual returns sit at a modest 18%.

Before you assume your fund manager is underperforming or that the data is wrong, here is the reality: The fund house isn't lying to you. Your math is just different from SEBI’s math.

Per SEBI guidelines, mutual fund factsheets must declare performance every month-end using standardized, point-to-point returns (usually 1, 3, and 5-year CAGR). This assumes a hypothetical investor dropped a massive lump sum on Day 1 and withdrew it exactly at the month-end.

Unless your name is "The Perfect Investor," your real-world returns will vary based on the timing and amount of your investments.

Here are the 4 main reasons why your dashboard doesn’t match the official factsheets:

🔹 1. The SIP Effect (XIRR vs. CAGR)

Factsheets show point-to-point lump sum returns. But if you invest via a Systematic Investment Plan (SIP), you buy at different market levels every month. Your actual return must be calculated using XIRR, which factors in the exact timing of every single rupee you invest.

🔹 2. Direct vs. Regular Plans

Are you tracking the right benchmark? Factsheets usually highlight the Direct Plan's performance. If you invested through an intermediary or broker, you are likely in a Regular Plan. The higher expense ratio (due to built-in commissions) means your actual returns will inherently be slightly lower.

🔹 3. The Cost of Timing

Missing out on just a few of the market's biggest rally days because you delayed an investment or started later in the year can create a massive divergence between your personal returns and a standardized 3-year trailing window.

🔹 4. Holding Period Mismatches

A factsheet's 3-year return lookback is rigidly fixed to the past 36 months. Your portfolio, however, reflects the exact timeline elapsed since you hit the invest button. Comparing a 2.5-year real portfolio to a 3-year fixed factsheet is simply not an apples-to-apples comparison.

The Bottom Line?

Don't judge your portfolio's health based entirely on a standardized website ranking. The factsheet is an excellent tool to gauge how a fund behaved over a fixed historical block, but your personal XIRR is the only metric that truly matters for your financial goals.

👇 Have you noticed a big gap between factsheet returns and your personal portfolio? Let’s discuss in the comments below!


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