How to calculate ELSS returns?
Calculating returns on ELSS (Equity Linked Savings Scheme) involves assessing the growth of your investment over a specific period. To calculate ELSS returns, start by noting the initial investment amount (purchase NAV) and the current value of units (redemption NAV) at the end of your chosen investment period, typically three years or more due to the scheme's lock-in period.
Compute the absolute return using the formula:
Absolute Return=(Investment ValueRedemption Value−Investment Value)×100
This formula gives you the percentage gain or loss on your investment over the specified period. For a more comprehensive assessment, beneficial for investments held over multiple years, calculate the annualized return:
Annualized Return=(Number of YearsTotal Return)
This metric provides a standardized average yearly return, factoring in compounding effects.
These calculations enable investors to gauge how well their ELSS investments have performed compared to their initial expectations and market benchmarks. They provide valuable insights for making informed decisions in future financial planning and investment strategies.
https://www.fundsindia.com/elss-calculator
