CAGR (compound annual growth rate)

CAGR is the constant annual rate that would grow a starting amount to its ending value over the period — a single, smoothed yearly return.

Compound annual growth rate answers a simple question: at what steady yearly rate would my money have to grow to get from the start value to the end value over this many years? It smooths a bumpy path into one comparable number, which makes it useful for stacking strategies — and the index, and a fixed deposit — side by side.

Because it is smoothed, CAGR says nothing about the ride. Always read it alongside maximum drawdown and an after-cost, after-tax figure, never on its own.

Definitions are educational and consistent with Thuztra’s backtest methodology. Backtests are research, not investment advice; past performance does not predict future results.