Rolling Returns vs Point-to-Point Returns

Introduction

Most investors look at one-time returns to judge a mutual fund. But what if you’re catching a good year or a bad year by chance?

That’s why seasoned investors prefer Rolling Returns — they give you a fuller picture of how a fund performs in different market cycles.

Point-to-Point Returns – Snapshot View

This measures performance from one date to another.

 🧮 Example: Jan 1, 2019 to Jan 1, 2024 = 11% CAGR

 🟥 Problem? One-off events or timing luck can distort the picture.

 Rolling Returns – Moving Window View

Rolling returns measure performance over multiple overlapping periods.

🧮 Example: 3-year rolling returns calculated daily from 2015–2024 

 ✅ Shows consistency

Real-Life Example: Nisha vs Arjun

• Arjun invested in a fund because it showed 18% point-to-point returns (2016–2021).
• Nisha checked the 3-year rolling returns — and noticed the fund had dipped below 5% several times.

Conclusion

Point-to-point returns can mislead by focusing on a cherry-picked period. Rolling returns, on the other hand, reveal the real picture of fund performance across time.

When comparing funds, always look at 3-year or 5-year rolling returns. It’s a smarter, safer way to judge consistency.

Summary Table: Returns Comparison