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CAGR (Compound Annual Growth Rate) measures the smoothed annual growth rate of an investment over a period, as if it grew at a steady rate each year. It is the standard metric for comparing investment performance over different time periods.

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1. 1CAGR = (End Value / Start Value)^(1/years) − 1
2. 2It represents the hypothetical constant rate that would produce the same result
3. 3Ignores volatility — two investments with the same CAGR can have very different risk
4. 4Always lower than or equal to the arithmetic average annual return

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