CAGR compound annual growth rate

CAGR is the constant rate at which a figure would have to grow each year to move from its starting value to its ending value over the measured period. It turns an irregular path into a single comparable annual number, which is why it is the correct way to summarise a multi-year return: adding each year's percentage and dividing by the number of years is systematically wrong. What it hides is the path, and the path matters: two series with the same CAGR can have suffered very different drawdowns along the way.

See the full glossary · What the Celsmar financial terminal is

Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.