YTD (Year-to-Date) in Mutual Funds

Starting your investment journey can be exciting but it’s natural to have questions along the way. There’s so much to understand in financial terms. One of them is ‘YTD’ or Year-to-Date. You’ll see this a lot when looking at mutual fund returns.

Whether you’re just starting your investment journey or have been investing for years, it is important to have a correct understanding.

Read on to understand in depth.

What Year-to-Date Means and Why It Matters?

YTD meaning is simple, it tells you how your fund has performed so far in the current year. 

For example, say today is February 17, 2025. The YTD return shows you how your fund performed from January 1, 2025, to February 17, 2025.

YTD, you don’t have to calculate returns yourself. It shows your investment returns for the year so far, making it easy to track performance. 

Tracking YTD returns can help you see if your mutual fund is doing better or worse in the current year versus previous years. It’s an important metric for monitoring your investments.

How is YTD Calculated?

The YTD return of a mutual fund can be calculated using a simple formula. It compares the current value to the initial value at the start of the year.

The year-to-date formula is:

YTD return = [(Current Value − Initial Value) / Initial Value] x 100

Let’s understand this better with an example.

Suppose you invested ₹10,000 in a mutual fund on January 1, your NAV on the start date. Now, on June 30, the NAV has grown to ₹11,500.

To find the YTD return:

• Current Value = ₹11,500
• Initial Value = ₹10,000

Putting this into the formula:

YTD return = (11,500 – 10,000) / 10,000 x 100
= 1,500 / 10,000 x 100
= 15%

In the above example, we can see that the fund has grown by 15% since the beginning of the year. 

What are the Uses of YTD in Mutual Funds?

Here are some of how YTD figures can be useful for mutual fund investors:

• Gauge interim performance: YTD helps gauge if a fund is on track to meet its expected annual returns or not.
• A benchmark for comparing funds: YTD return helps compare different funds over the same time frame.
• Review fund managers: Funds with low or negative YTD returns may indicate ‘underperformed’ by the fund manager.
• Tax planning: Since YTD figures are based on the calendar year, it helps plan for taxes on capital gains.
• Rebalance portfolio: You can see which funds have overperformed and need rebalancing to match asset allocation.

Things to Remember About YTD

While YTD is a useful metric, here are some things to remember:

• Past performance is not indicative of future returns.
• Do not make quick decisions based on only YTD figures. Look at longer return periods.
• YTD for different funds can’t be compared if their portfolio objectives and asset classes vary.
• For tax planning, look at longer short-term and long-term capital gains.
• Do not forget your original investment goals and risk appetite while analysing YTD returns.

The Bottom Line

You can use YTD as one of the performance metrics along with other key aspects like your risk profile, investment goals and time horizon to make informed decisions. If you need cash urgently without selling funds, you can choose Fibe. 

With Fibe Loan Against Mutual Funds, you can get up to 80% of your mutual fund value where you only need to pay the interest. It enables liquidity while remaining invested for future growth.

FAQs

Can I use YTD to compare different mutual funds?

Yes, YTD allows you to compare different mutual funds with same time period. While comparison is allowed, one needs to consider things like their goals, types of assets and risk levels. 

Example: Comparing a bond and a stock fund just by YTD may not give you the full picture.

Does YTD account for dividends and interest?

Yes, YTD returns include dividends and interest since they are factored into the fund’s net asset value.