Compound Annual Growth Rate (CAGR)

Formula

CAGR is the geometric mean annualized return. Given a start median V_start at time t_start and an end median V_end at time t_end, CAGR = (V_end / V_start)^(1 / years) − 1, where years is the actual time span between the two anchor dates.

cagr = (V_end / V_start) ** (1 / actual_years) - 1

Anchor windows

We look for an aggregation centered approximately 1, 3, or 5 years prior to the latest period_end, within a ±180 day search window. If no aggregation exists in that window, we fall back to the oldest aggregation we have and compute against the actual elapsed years — this is how the 5y figure can use only 3.4 years of data on a younger variant.

Why geometric mean, not arithmetic

Arithmetic average of yearly returns overstates long-run returns when there is volatility. CAGR uses the geometric mean, which is the only annualization consistent with compounding. A bag that goes up 50% then down 50% has an arithmetic average of 0% but a CAGR of −13.4% — the latter is the truth.

Confidence

CAGR confidence is the lower of the two anchor aggregations' confidence labels. If either is low, the CAGR is low confidence too.