When your money is spread across a mutual fund, an FD, PPF and a few stocks, each earning a different return, the simple average of those returns tells you little. This calculator weights each return by how much you have in it, gives the portfolio's weighted average return, and projects what the whole portfolio could grow to.
Enter the investment period.
Add each investment with its amount and expected yearly return.
Read the weighted average return and the projected portfolio value.
Weighted average return: R = Σ(amountᵢ × returnᵢ) ÷ Σ amountᵢ
Value after n years: FV = Σ amountᵢ × (1 + returnᵢ)ⁿ
A weighted average return calculator finds the single return that best describes a portfolio made of several investments. Instead of adding up the returns and dividing by how many there are, it gives each return a weight equal to the share of money in that investment. A large fixed deposit therefore pulls the average towards its rate, and a small high-risk holding moves it only slightly.
It answers the question most investors really have: across everything I hold, what am I earning on average? It is useful when you split savings between mutual funds, PPF, FDs, gold and stocks, when you plan how to divide a lump sum, or when you want to know whether adding a new fund will lift or drag the overall return. The calculator also projects each investment forward and shows what the whole portfolio could be worth after the period you choose.
1. List each investment with its amount A and its expected yearly return R in percent.
2. Add the amounts to get the total invested: T = A₁ + A₂ + … + Aₙ.
3. Multiply each amount by its return: A₁ × R₁, A₂ × R₂ and so on.
4. Add those products and divide by the total: weighted return = Σ(A × R) ÷ T.
5. To project forward, grow each investment separately: Aᵢ × (1 + Rᵢ ÷ 100)^years.
6. Add the projected values to get the portfolio value, then find its effective yearly growth: (portfolio value ÷ T)^(1/years) − 1.
A portfolio's return is total money earned divided by total money invested. Each investment earns Aᵢ × Rᵢ in a year, so the portfolio earns Σ(Aᵢ × Rᵢ) on a base of ΣAᵢ, which is exactly the weighted average formula. A simple average of returns quietly assumes every investment holds the same amount. With ₹90,000 in an FD at 7% and ₹10,000 in a fund at 15%, the simple average says 11%, but the portfolio actually earns ₹6,300 + ₹1,500 = ₹7,800, or 7.8%.
The weighted average describes the first year. After that, the investments with higher returns grow faster and become a larger slice of the portfolio, so the portfolio's weights drift towards its best performers. As a result, compounding each investment separately gives a slightly higher final value than compounding the whole portfolio at the starting weighted average. The gap is small over a few years or when returns are close, and grows over decades or when returns differ widely. The calculator shows both figures so you can see the effect.
The returns you enter are assumptions. Fixed-income products such as FDs, PPF or bonds have known or declared rates, while equity funds and stocks have uncertain returns that can be negative in some years. If you rebalance, selling winners to restore your original split, the portfolio behaves more like the starting weighted average and less like the drifting projection. Returns here are before tax and fees; use post-tax returns for a fairer comparison between, say, a taxable FD and a tax-free PPF.
Meera has ₹2,00,000 in an equity mutual fund she expects to return 12% a year, ₹1,50,000 in PPF at 7.1% and ₹1,00,000 in a fixed deposit at 7%, and wants to see the picture over 15 years.
Share of each investment (its weight): Investment 1: ₹2,00,000 ÷ ₹4,50,000 = 44.44% Investment 2: ₹1,50,000 ÷ ₹4,50,000 = 33.33% Investment 3: ₹1,00,000 ÷ ₹4,50,000 = 22.22%
Amount × expected return: ₹2,00,000 × 12% = ₹24,000 ₹1,50,000 × 7.1% = ₹10,650 ₹1,00,000 × 7% = ₹7,000
Weighted average return = Σ(amount × return) ÷ Σ amount: ₹41,650 ÷ ₹4,50,000 × 100 = 9.26%
Value of each investment after 15 years = amount × (1 + return)^15: ₹2,00,000 × (1 + 12%)^15 = ₹10,94,713 ₹1,50,000 × (1 + 7.1%)^15 = ₹4,19,695 ₹1,00,000 × (1 + 7%)^15 = ₹2,75,903
Portfolio value: ₹10,94,713 + ₹4,19,695 + ₹2,75,903 = ₹17,90,311
Effective yearly growth of the whole portfolio: (₹17,90,311 ÷ ₹4,50,000)^(1/15) − 1 = 9.64%
Why it differs from the weighted average: At a steady 9.26% the portfolio would reach ₹16,97,718. The actual ₹17,90,311 is higher because faster-growing investments become a bigger share over time.
Answer: Weighted average return 9.26%; Total invested ₹4,50,000; Portfolio value after 15 years ₹17,90,311
Averaging the returns without weighting them by the amount invested.
Using the original purchase amounts when the current market values are very different.
Mixing pre-tax and post-tax returns, which makes a tax-free product look worse than it is.
Treating an expected equity return as guaranteed for every year.
Leaving out cash or savings account balances, which lower the true portfolio return.
Checking the overall return of a portfolio spread across funds, deposits and PPF.
Planning how to split a bonus or lump sum between several investments.
Testing whether adding a new fund raises or lowers the expected portfolio return.
Comparing an aggressive and a conservative asset allocation.
Explaining weighted averages with a real money example in commerce and finance classes.
Why not just average the returns?
A simple average treats ₹5,000 in a small-cap fund the same as ₹5 lakh in an FD. Weighting by amount reflects how your money is actually invested.
Why does the portfolio grow faster than the weighted average return?
Over time the higher-return investments grow into a larger share of the portfolio, so the whole portfolio compounds a little faster than the starting weighted average. The difference is larger when returns are far apart and periods are long.
Should the weights be current values or amounts invested?
For the portfolio's return going forward, use current market values. For a quick plan of new money, use the amounts you intend to invest.