what is the difference between the annualized total return and the compound annual growth rate cagr 
the annualized total return is conceptually the same as the cagr in that both formulas seek to capture the geometric return of an investment over time the main difference is that the cagr is often presented using only the beginning and ending values whereas the annualized total return is typically calculated using the returns from several years this however is more a matter of convention in substance the two measures are the same the bottom lineannualized total return represents the geometric average amount that an investment has earned each year over a specific period by calculating a geometric average the annualized total return formula accounts for compounding when depicting the yearly earnings the investment would generate over the holding period while the metric provides a useful snapshot of an investment s performance it does not reveal volatility and price fluctuations 