Return on mutual funds is calculated on the basis of amount (NAV) at the beginning and (NAV) at the end and total units one holds. Mutual fund return is for the total period of holding.

The formula to calculate the holding period return is:

(NAV at beginning*No. of units) – (NAV at the end* No. of units)/ Total units.

Above stated formula is for calculating the annual return, hence in case of any shorter or longer period, the same shall be multiplied by the period of holding as well.

When units are purchased or sold frequently during the year, in case capital gain yield should be considered for finding out the return on mutual funds.

Dawn Cheriananswered.