Smallcase is a platform that allows you to buy and sell stocks in predetermined combinations and quantities that may follow a theme or an idea that the fund manager wishes to express.
They have taken over the equity space, with many new age investors opting for the ease and affordability being offered by this platform - for investors and fund managers.
You must be wondering how one can track their returns to get a true sense of what they are making on their investments. Here are 3 ways to do so!
Absolute Returns
It is expressed as the total gain or loss incurred on a particular investment amount
Absolute Returns = (Current value of investment - Initial value of investment / Initial value of investment) * 100
This method can be used appropriately if the investment was a one-time, lumpsum payment in the smallcase and the time period is less than a year, as absolute returns don’t showcase at what time interval the returns have been made
CAGR
It is the annualised rate of return of an investment, assuming that compounding is continuous and profits are reinvested at the end of the year into the same fund
Compounded Annual Growth Rate =[ (Current Value/ Initial Value) ^ (1/no. of years) ] - 1
This method is ideal if you wish to ascertain how much your one-time, lumpsum investment into the smallcase will make if you keep reinvesting the profits on a yearly basis
XIRR
Internal Rate of Return, or XIRR in MS Excel terms, is an annual rate of return that takes each transaction made within a period of time into consideration, thereby providing an accurate depiction of returns
XIRR on Excel = XIRR(values of inflows and outflows, dates of those inflows and outflows)
This method is especially useful for those who invest via SIPs, thereby allowing them to truly evaluate their smallcase investment
Watch this video for further ease of understanding!
XIRR is a new feature by smallcase and helps you ascertain your investment growth if you have invested in it for more than a year and have added or removed funds from the smallcase multiple times over the time span!
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