What does CAGR measure?
✅ Higher = stronger growth per year
Shows by what percentage the value grew on average per year, with compounding. Example: if €1,000 grows to about €1,469 in five years, that is 8% per year.
How is CAGR calculated?
(Final value / Initial value)^(1/n) − 1
Final value = portfolio value at the end · initial value = initial capital · n = investment period in years (trading days ÷ 252)
How are values of CAGR usually read?
- < 0 %
- Loss
- 0 – 4 %
- low
- 4 – 8 %
- medium
- 8 – 12 %
- high
- > 12 %
- very high
Rules of thumb — where a value lands depends on asset class, period and market phase. A classification is no recommendation.
Worked example with real prices
Three securities from the test data, four allocations, calculated in the portfolio backtester over the same period:
| World equities | Euro government bonds | Gold | CAGR |
|---|---|---|---|
| 100 % | 0 % | 0 % | 12.69 % |
| 60 % | 40 % | 0 % | 8.37 % |
| 40 % | 40 % | 20 % | 7.99 % |
| 0 % | 100 % | 0 % | 1.59 % |
Prices from 13 Nov 2009 to 7 Oct 2026 in euros, starting capital €10,000, annual rebalancing, without order fees and taxes; Sharpe ratio with a risk-free rate of 2 %. Past results are no indication of future ones.
All three securities are in the test data — you can recalculate the example yourself on the free plan.
When is CAGR useful?
When you want to compare portfolios over periods of different length: the annual return converts every period to one year.
What are the limits of CAGR?
Does not show how far the value fell along the way: 8% per year with a calm path looks the same as 8% per year with a 60% decline in between. Read it together with volatility and the largest decline.
Where do you see CAGR for your own securities?
In the portfolio backtester, CAGR appears for every calculated allocation of your securities. The Watchlist shows it for each individual security.
Last updated: 30 Oct 2026