Mi MT Allcap’s quarterly returns in FY 2021 read as follows. Q1 : 13.32% | Q2 : 42.58% | Q3 : 15.07% | Q54 : 29.79%. When you add this, we get a total of 100.76% while it’s been mentioned as 141.3% in the HUB. Can you please clarify ?

The total returns cannot be obtained by adding the % returns achieved every month or every quarter since compounding has to be incorporated.

Let us see this with an example.

Let’s say you invested Rs 100 in the beginning of a given FY and the portfolio returned 25% in each of the 4 quarters.

Q1 : 25% | Q2 : 25% | Q3 : 25% | Q4 : 25%

Start investment – Rs 100

– End of Q1 : 100 x (1 + 25%) = 125

– End of Q2 : 125 x (1 + 25%) = 156.25 < you made 25% on current capital Rs 125 and not on start capital Rs 100 >

– End of Q3 : 156.25 x (1 + 25%) = 195.3

– End of Q4 : 195.3 x (1 + 25%) = 244.12

Now in total : the total returns would be = (244.12 / 100) – 1 = 144% Whereas if you add all quarterly returns you get only 100%.

When you replicate the same exercise on Mi MT Allcap, you will notice that the total returns in FY 2021 is 141.3%

If you have any further doubts or questions, please send an email to support@weekendinvesting.com